continues to set up a bottom after 3 tests of $47. We have seen a very narrow trading range since the panicked exodus by the overextended bulls. After 5 months of coercion and collusion by Opec members I wonder if investors have grown tired of their typically optimistic statements?.. Much Squabbling exists on how the cuts should be measured, Exports or production cuts? Supply builds as reported by the API
today indicate another rise in supplies. the 13 week total has seen the increase amount to over 40 million barrels. Drilling activity increased this week but still remains over 1000 rigs shy of 2014 highs. Still the rate of production has risen steadily approaching 9.2 million barrels a day, trailing the historical weekly production of just over 9.6 million. If prices were to rally and approach $60 it might only take 4 months to resume setting new weekly production rates. An argument can be made that domestic demand has fallen off as we have seen record exports of crude. In 2013 exports averaged around 100k a day. in 2016 several months exceeded 600k a day with average around 500k. More players are jumping into this market. From a technical standpoint the charts show a gap from March 20th that needs to be filled. I think this will occur tomorrow. But it is doubtful that there will be enough fundamental support to rally into the $50's. Crude barely eclipsed my end of year prediction of $53.85... I haven't seen anything that indicates a supply contraction is near. RBOB is up almost 25 cents from the end of last years summer driving season. Higher prices will make some plan shorter trips this year. Will unforeseen events alter this rosy scenario of stability? Lets hope not.