Why did the API report that crude supply fell almost 5.0 million barrels and the EIA reported an increase? Part of the reason is a drop in refinery runs and the reclassification of some supply released again from the Strategic Petroleum Reserve.

It was an active night for global markets, including a terror attack in Iran, the takeover of Banco Popular in Spain--not to mention the American Petroleum Institute Report that showed a big drop in crude supply but big increases in gasoline and distillates.

Another week, more all-time highs. For the Dow, that meant the 21,169 high at 170 days after Brexit held for 65 days. Do you think 69 days from that March 1 high will be significant? It might and just as important this week is 144 days from the early November low just before the election. The freight train has more cycle excuses to take a pause or even a fall.

Iraq's Kurdistan has agreed on new deals to borrow $3 billion from trading houses and Russian state oil firm Rosneft that will be guaranteed by future oil sales to strengthen its fiscal position as the semi-autonomous region fights Islamic State.

It may be the year of the Fire Rooster on the Chinese calendar, but for China and the rest of the Asian block, it is going to be the year or decade of crude oil. Oil prices hit a three-week high as the market focused on rising oil demand expectations and dwindling global oil inventories. While U.S. oil demand slipped a bit for seasonal reasons, a report that India's oil demand will soar gave the bulls some more reasons to be bullish.

As crude oil traders focus on rising rig counts and the potential for OPEC production cuts, a critical battle against ISIS has been unfolding in Iraq overnight. Reuters News reports that Iraqi government forces, with air and ground support from the U.S.-led coalition, launched an offensive to drive the Islamic State from the northern city of Mosul, the militants' last major stronghold in the country.

Crude oil prices are on the rise as traders are starting to see signs of production destruction. What is production destruction? It is the opposite of demand destruction. When prices go too high we see demand destruction or demand fall. When prices go too low, we see cut backs in spending and investment that will call production to fall. We are now seeing the early stages of production destruction of a mammoth scale that will be felt for years to come.