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Originally Posted by heep223
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.
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Further to your point, I read in an article last week that the rig count in the U.S. is at its lowest point in recorded history. Some speculate that it may be at its lowest point since the Pennsylvania oil boom of the late 1800's.
Pretty stunning when you actually sit back and think about the implications.
The Permian basin has also rolled over; rig counts under 200 in the area, last major U.S. basin not to be in a declining profile....things are setting up for a period of material out performance in the future.
If all you do is read the Bloomberg, BNN, CNN, etc. etc. headlines, you are missing what the numbers are pointing to.