This may be a great opportunity to buy energy before an oil price rebound

[Cliff_N]

https://finance.yahoo.com/news/martin-pelletier-why-may-great-100016406.html

This has to be the strangest year I’ve ever seen in energy markets and last week was a perfect example why.

On Wednesday morning, the Energy Information Administration (EIA) announced the biggest weekly inventory draw on record. For the week ending July 31, the EIA reported that U.S. crude inventories dropped by a whopping 17.049 million barrels as exports rose to more than five million barrels per day and refineries boosted demand. What did oil do? It sold off by more than two per cent on the day, and no one I spoke to in the industry could explain why. It took OPEC stepping up a day later announcing that it is extending its million-barrel-per-day voluntary production cut into September — and warning the cuts could be “extended or extended and deepened” — to backstop oil prices.

This is a market where paper traders and speculators have completely stopped counting barrels, holding the least net-long U.S. crude position since April, leaving those in the physical markets shaking their heads. However, I’ve learned that the longer this goes on, the worse the situation gets and the greater the ultimate reaction in price.

[dan_s]

Fear of the Fed is a powerful tool being used to keep a lid on oil prices, but supply/demand fundamentals will win the battle.

IEA's August Oil Market Report should be quite interesting.