Quote:
Originally Posted by GGG
Oil up for no reason today. After the Russia/Saudi talks fall apart its going to crash back down. But if Russia/Saudi can keep juicing the prices with fake optimism its good for us.
But we're almost in double meat territory.
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This is pretty funny logic. Oil going up is bearish? Oil going up "for no reason" is very bullish. Even more bullish is when oil shrugs off large inventory builds to keep going up. It's a sign the market is looking past the supply glut and realizing that we could be in an under-supplied market as soon as this year. Obviously it could come back down and/or bounce around the mid-30s all year. But WTI rallying back above $37 is undoubtedly a good sign, even if it doesn't fit your personal narrative that the recent highs are based on "fake" optimism out of OPEC.
Things are looking a lot more constructive in terms of balancing the market. US production is down for the 4th consecutive week, first time since the shale boom. Watch production fall off significantly as non-OPEC activity is at levels we haven't seen since the early 1980s. Price is recognizing this and I wouldn't be surprised in the slightest if we ended 2016 in the 50s on WTI.