I have been an oil bull for some time. Those who saw my posts at Dumbmoneytracker would know that. I am also a bull on the Oil Stocks/Gold stocks and Oil to Gold ratio over the next 12 months.
This morning we saw the usual asstalking from zerohedge, documenting how OPEC production hit a high.
http://www.zerohedge.com/news/2016-12-05/opec-oil-production-hits-new-all-time-high-brent-surges-16-month-high
For the past 3 months ZH ran multiple articles showing how oil was going to breakdown like it did in 2015....when that failed they throw this nonsense.
ZH is about 2 clicks away from the ludicrous Gold bugs..so I lump them in the same category.
Here is the real oil situation.
1) Current Demand is 300,000 barrels lower than supply. Estimates have it even higher than supply in some cases.
2) Expected demand increase is 1.0-1.2 Million barrels per day next year.
3) OPEC plus NON-OPEC have agreed to cut around 1.5 Million barrels a day of supply.
4) Mega Projects coming online fall off a cliff in the 2018-2020 time frame.
By December 2017 I expect the market to be in a 2 Million Barrel plus deficit. At the minimum we will see $70.
\Will OPEC Cut? I think they will . The talk has been about the shale oil in US but the real hit to supply has been the Mega Projects and those have been gutted left, right and center.
Stay long the oil bull. Don't get cute and don't try and short this. It will rip your balls off.
A blog dedicated to educating the highly misinformed which includes subscribers to Gary Savage, Smart Money Tracker. Above is his most priceless call.
