For years the fascination with OPEC, shale drilling, strategic petroleum reserve selling, “global supply/demand balance”, etc. has taken up most of the focus regarding oil analysis. People can debate those issues, but my bearish view of crude in January 2015 had little to do with those issues: “I will emphatically state that oil has much further to fall – $35/barrel minimum. And this will drag on for years.” And in January 2016 my view was crude oil was anti-consensus again: “At the same time, the analysts who were bullish at $100 are now looking for $20 or even $5 per barrel. So oil is beginning a bottoming process.” And my belief in the secular bottom occurring in February 2016 still stands, and later this year we will see a major retest of that $26 bottom, but at a much higher price. But that’s down the road, and currently it is certainly concerning how the energy shares have been continuing to severely lag crude oil itself. And the frackers also hit another new low today. There are several posts over the last 9 months discussing these issues, and here’s another recent video about it.
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