Black Gold- What a week. Hard to tell what the press is trying to set the investing public up for. They did mention annual inventory tax in the discussion of the crazy weekly inventory data. What wasn't crystal clear was the 7 million barrel draw was a lack of imports, about a days worth. So a half dozen tankers or so didn't unload. You would expect the opposite after Jan 1 so if it happens will the new bulls get nervous?
Tidbits from around the net that I saw-
Iran sold off it's floating storage last month, 13 super tankers worth of extra oil headed I am guessing for China as that is their major market.
Nigeria cut production but not because they wanted to. The negotiations with the rebels have obviously not gone well so they remain a wild card. Nigerian light sweet oil used to be the only thing you could use to meet EPA's Southern California summer blend requirements.
Did the Saudi's cut production to meet their goal or was it, as the old timers say, because their customers order less in the winter. Saudi production cut story hit the news wire twice in one day three hours apart. According to Zerohedge interpretation of the Bloomberg price chart the algo's couldn't figure out the Wall Street Journal Headline but they did figure out Reuters and instantly bought. If you are trading this stuff please keep that kind of action in mind when you set stops.
All news stories for the upcoming ARAMCO IPO are citing unnamed middle eastern sources so that has to be accurate information, no ?
Finally my favorite piece of conflicted cheerleading reporting was from the Wall Street Journal. After reporting that it is becoming clear the agreed to cuts will not balance supply they went on to quote experts who said the opposite. I did a quick google on the expert. His 13 K for his hedge fund showed the $350,000,000 or so that his firm manages was mostly in shale oil, oil services, mining and a couple of railroads. Hardly an unbiased opinion.
My biased opinion remains that OPEC is continuing to control the narrative. They set it up to guarantee early results, it is later on that it will become hard slogging. So first by eating pastries in Vienna with reporters they succeed in raising prices while increasing production into an oversupplied market. Now, when they just about always drop production they drop production but the entire narrative has changed because of the way they framed it. Instead it is that they are following through on the agreement. So those 28 year old history majors running highly leveraged funds we were talking about yesterday should still be feeling positive that they are part of the largest long position (most lopsided) in the history of CL. What could possibly go wrong.