Energy Prospectus

Take a hard look at this chart: http://www.marketwatch.com/investing/index/dxy/charts

The price of oil moving over $50/bbl is news, but it is amazing considering the recent spike in the U.S. dollar. Normally, when the dollar moves up the price of oil moves down. If the dollar pulls back to 95, I think oil will move up to $55.

FWIW, Jim Cramer w/ news that might have a bearing on recent crude pricing:

<<Cramer: Oil Inventory Numbers Are About to Take a Huge Hit
By

JIM CRAMER
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| OCT 10, 2016

There are big changes afoot for the Energy Information Administration's (EIA) Wednesday crude oil inventory number, and if they are not explained properly as a no-longer-apples-to-apples comparison, the rally in crude above $50 will indeed be justified as a panic on the part of those who need oil -- actually consumers -- vs. just the usual trading shenanigans.

Specifically, the always-prescient Rusty Braziel, my authority on all things energy from his perch at RBN Energy, points out that, "Starting with the Weekly Petroleum Status Report (WPSR) published on Oct. 13, 2016, the U.S. total commercial crude oil inventory weekly data series will no longer include lease stocks." This change will reflect an understanding by the keepers of these numbers "that lease stocks are not yet available for commercial use and that in many cases operators do not count them as production until they are transferred off the lease via pipeline, rail or trucks to tank farms for storage."

How big an impact will this be? OK, Braziel says, "Not accounting for other stock changes reported by operators of pipelines and tank farms, commercial crude oil inventories for the week ending Oct. 7 (published on Oct. 13) will be about 31 million barrels lower because the lease stocks will no longer be included in the total."

You can only imagine what this will mean to those who are short oil or are underweighted in the group, which is now well off its bottom. Of course, it will be chimerical, but who will really care? The rush to turn on the spigot, though, of all of those companies that make money at $50 a barrel will be great, but not great enough to overcome the potential impression these inventories might give us. I think the fear of being short -- which so many were -- will keep the oil ball in the air and force fund managers to put money to work in the group. This change is not expected by many observers and could be quite jarring when the numbers cross.>>

For years I have said that the weekly EIA storage reports includes a lot of BIG plug numbers. This is one of the largest. There is also a big number in the storage total for "pipeline fill" that is a pure SWAG.

In a detailed report I got from Raymond James early in September, RJ said we'd see a big decline in crude oil storage numbers during the 2nd half of 2016. So far they have been right. RJ still forecasting $60 WTI by year-end and $75 early in 2017.

I am not as bullish as RJ, but if OPEC + Russia do put a lid on oil production, the market will balance quickly and oil prices will respond.