Given OPEC's decision to keep quotas unchanged, Iranian guarantees of oil supply and U.S. statements excluding the possibility of oil sanctions, crude is poised to fall next week.
OPEC is likely to be a critical event next week. A cut in production, however, seems quite unlikely despite slower fourth-quarter U.S. GDP growth out today and a well-supplied market. The specter of oil supply disruption haunts energy markets.
Massive inventory declines in crude oil are part of a three-month trend, heating oil prices continue their relentless rise, and the supply disruption premium is in full effect. This may only be the beginning; the winter oil bull run has begun.
The tangible, physical disruption of Nigerian supply has propped up prices over the past few weeks.
The supply disruption premium has overwhelmed fundamental physical supply in the marketplace as issue number one.
This is a situation where you've got a lot of supply on hand, leading to a drop in prices.
Geopolitical power is moving from energy consuming countries to the producers. We may see more of these supply shocks in the years ahead.