About The Author

Phil Flynn

Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665

Iran’s Revolutionary Guard says it put a stop to the protests in Iran, yet the oil traders are not that convinced. After many arrests and over 20 dead, the Iranian people are tired of being left out of the global economic surge.

At the same time, the global economic surge is draining U.S. and global oil reserves at a record pace. The API reported another 4.992 million barrels drop in crude supply as strong demand continues to draw down supply. Part of that demand is coming from the U.S. manufacturing sector, that according to the ISM posted its best growth since 2004, a great indicator of current and potential energy demand.

We did see a big 4.272-million-barrel increase in distillate supply, but thank goodness because we need more supply to meet this cold demand and even with the increase, supplies are below average. The increase came as Europe has sent tankers of distillate to shore up the tightest market that we have seen in years, with record breaking cold! How Cold is it? It was so cold that former bearish oil analysts have changed colors and now are suddenly bullish. Now that is cold!

Gasoline supply did rise by 1.87 million barrels as refiners maxed out distillate and drivers stayed closer to home to stay warm. Cushing Oklahoma, the NYMEX delivery point, also saw another 2.11 million barrel drop.

Now as refiners clamor for more oil, U.S. shale producers are not rising to the occasion. At least not in the U.S. U.S. refiners still covet that heavy crude and shale light condensate is helping, but is not able to replace the heavy blend.

Natural Gas on the other hand is not getting as much of a boost on the cold. Strong U.S. production numbers are helping this market stay somewhat grounded. Of course if we see a bigger than expected withdrawal today that could change.

The cold in the south could impact crops. We are seeing a move up in Orange Juice and your salad could get a bit more expensive if the cold sets in.

Bi Coin may be pulling back but Ripple is ripping. Ripple now is the second most capitalized crypto currency. Gold, the original alternative currency, has also been on a tear. Gold hit another three-month high after 8 higher closes. After the Fed Minutes, we backed off and with the dollar looking to perhaps stop the free fall, Gold may see some profit taking.

The oil super cycle has just begun. While we will get a pullback after it warms up, there is no doubt that we are in a new bull cycle. As I have written many times before, the double bottom at $26 on the monthly chart and the fact that we saw the largest pullback in capital spending in history impacted futures supplies.

At every major oil market bottom, they say this time is different, yet it usually is not. Low prices cure low prices and many missed the signals. Most of the crazy calls for $10 a barrel oil and predictions that oil would never trade above $40 then $50 then $60 are distant memories. Shale oil increases are not keeping up with demand and we will need them to ramp up because barring an economic downturn, or black swan, we are now behind the demand curve.  Last year many were in denial but now the demand numbers and the crude supply drops are speaking for themselves.

Tune into the Fox Business Network (FBN) is the best in business! Make it your New Year TV Home! The MoneyShow Orlando is coming in February. Get out of the cold! Go to the Money Show!  Sign up for my class talking about a historic bottom in oil and what it means for your future.  Why did many analysts miss this bull market? Time is running out. Go to Flynn.OrlandoMoneyShow.com  or call me at 888-264-5665 or email me at pflynn@pricegroup.com.

Thanks,
Phil Flynn

 

Questions? Ask Phil Flynn today at 312-264-4364

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A Subsidiary of Price Holdings, Inc. – a Diversified Financial Services Firm. Member NIBA, NFA

Past results are not necessarily indicative of future results. Investing in futures can involve substantial risk of loss & is not suitable for everyone. Trading foreign exchange also involves a high degree of risk. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should seek advice from your advisors as appropriate to ensure that you understand the risks and can withstand the losses.

The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The Price Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author. Trading in futures contracts, options on futures contracts, and forward contracts is not suitable for all investors and involves substantial risks. ©2018

Questions? Ask Phil Flynn today at 312-264-4364         A Subsidiary of Price Holdings, Inc. – a Diversified Financial Services Firm. Member NIBA, NFA Past results are not necessarily indicative of future results. Investing in futures can involve substantial risk of loss & is not suitable for everyone. Trading foreign exchange also involves a high degree of risk. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should seek advice from your advisors as appropriate to ensure that you understand the risks and can withstand the losses. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The Price Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author. Trading in futures contracts, options on futures contracts, and forward contracts is not suitable for all investors and involves substantial risks. ©2018
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