Oil Price - Dec 23

[dan_s]

Over the three weeks ending 12/15/2017 crude oil inventories in the U.S. have fallen close to 900,000 barrels per day. Other OECD inventories are also falling. Each week the EIA has reported much larger declines than the "experts" had forecast. This is an EXTREMELY BULLISH pattern. If draws from storage continue into January, and I think they will, the price of oil must go a lot higher or else OECD inventories will get to dangerously low levels by mid-2018.

Watch this video to understand what's happening: https://www.raymondjames.com/corporatio ... -july-2017


The video is only 12 minutes long, but Marshall's predictions (made back in July) have been right on. What he did not predict was the impact of Hurricane Harvey. The effect of Harvey is that U.S. refiners are now running at a much higher utilization rate than normal because they are still catching up with demand for refined products. Harvey took 30% of U.S. refining capacity offline for months and refined product inventories were drained.

Look very closely at slides 13 & 14. Note that U.S. crude oil inventories are now way BELOW what Marshall predicted.

Also, note that he predicts a slight build in OECD inventories in Q1. I now think that will not happen. Back to back "Polar Vortex" cold waves are heading to the Eastern U.S. that will increase demand for distillates (home heating oil) and continue to keep U.S. refiners running at higher than normal utilization rates.

Conclusion: We will be looking at a MUCH TIGHTER global oil market in six months. This will become crystal clear to the market in Q1 and Marshall's forecast of $70/bbl WTI now looks accurate to me. Watch the video.