There is something good going on in the global economy and that is translating to higher demand and higher prices for oil. While short sighted and economically challenged people always think the lower price for energy the better, fail to grasp the realities of global trade and the real economics of production. With U.S. gas demand at a record and global demand on the rise, it reflects good economic times to come.
Crude oil prices are getting a look at terror premium as four Arab Gulf States, led by Saudi Arabia, cut diplomatic ties with Qatar as another terror attack takes place on the streets of London. Terror is becoming a top issue around the globe as ISIS took responsibility for the slaughter on London Bridge.
Oil edged higher on Wednesday as OPEC said it was committed to eroding a global surplus of crude, but increasing shale production in the United States and still-high global stocks threatened to pull prices lower.
Many crude oil analysts have done a disservice to the average American that is more impactful to gasoline prices than the supply of crude. Take a year ago; we were in an era of low prices for eternity and that oil might never trade above $40 a barrel again--and that was was wrong.
After getting through the oil markets yesterday with a collective yawn, I was busy watching reruns of Full House to keep my day moving. At some point though I did notice that the little action that there was in crude oil, it was on the sell side. Then as I reviewed the near useless Commitment of Traders Report, I also noticed that of last Tuesday that Funds were busy adding more shorts to their portfolios.