rounded corner
rounded corner
top border

Bear-y Scary. The Energy Report 10/31/2017

Bookmark and Share

It’s close to midnight and something’s buying oil in the dark. Under the moonlight, you see a pop that almost Stops Your Stop. You Try to Scream, but the computer takes the trade before you change It. You Start to scream, as oil rallies hard right before your eyes, You’re Paralyzed!

Cause this is thriller. Thriller night. And shale oil is not gonna save you. Oil is going to spike because it’s a Thriller night. Bears will be fighting for their life. Inside a kill thriller rally tonight.  They’re Out to Get You, Oil supplies are tightening on every side. They will possess you, unless you Change Your bearish trading style. Now Is the Time for you and me to start to buy my dear.  All Thru the Night, It’ll Save You from the Terror on the Screen, I’ll Make You See.

Markets rally across the Land; the trading hour Is close at hand. The Foulest Stench Is In The Air, The Funk of those oil spending cut back years and Grizzly Ghouls from cartel are Closing In To Seal Your Doom And Though You Fight To Stay Alive Your oil Starts To Shiver For No Mere Mortal Can Resist trading this oil Thriller.

Welcome to the bullish side. Oil prices maintain their bull market as a rash on analysts are starting to raise their oil price forecast and traders are getting afraid to go short as global inventories start to get sucked down faster that Dracula can empty a victim. Oil demands is on the rise and shale oil output is underperforming and the path to a shortage is looking ghoulishly real.

Jon Kemp of Reuters has a creepy if not horrifying assessment that says that “The oil market is now well into a cyclical upswing and within the next year the narrative about “rebalancing” is likely to be replaced by one about “tightening”.  He says that rebalancing started well before the production pact between the Organization of the Petroleum Exporting Countries (OPEC) and its allies went into effect in January. OPEC has been open about the fact that the rebalancing process pre-dated its agreement, with officials repeatedly noting the accord was intended to “accelerate” a process that was already underway.

Depending on which turning point is used, the rebalancing process has already been underway for 21 months (spot prices) or 32 months (spreads). Like any rebalancing process, adjustment is barely perceptible at first, which is why the turning point is often missed, but tends to accelerate over time. The current rebalancing started with an acceleration in global oil consumption, which was already evident in the first half of 2015 in response to lower prices.

Oil production did not decelerate until 2016, because of the lags in the system, and OPEC’s own output restraint did not start until 2017. But with consumption now running faster than production the market is steadily whittling away the excess inventories accumulated in 2015/2016.

During the last two rebalancing processes, after oil slumps in 1998/99 and 2008/09, front-month Brent prices took roughly 21 months and 26 months respectively to reach their first major peak. Meanwhile, the calendar spread took 21 months and 34 months respectively to reach its first cyclical peak after each episode. He points out that “The recent slump was in some ways deeper, and the recovery has certainly been more prolonged, but it can no longer be described as being in its early stages. The current rebalancing process is already therefore fairly mature and at some point in the next six to nine months will be more accurately described as tightening.

According to estimates from the OPEC/non-OPEC Joint Ministerial Monitoring Committee, OPEC is more than halfway to its declared target of reducing OECD oil inventories to their five-year average. Excess stocks have been drawn down by 180 million barrels since the start of 2017, although they are still 160 million barrels above the 2012-2016 average. In practice, stocks at the five-year average would probably prove uncomfortably low given the big increase in oil demand since 2012.

This oil market tightening is something we have been talking about for some time. The oil shortage creeps up on you before you know it and grabs you by the neck and then squeezes you. It then forces you to pay any pr ice for oil until it becomes too much and slows down this crazy demand. Then it’s a thriller!
Phil Flynn
Questions? Ask Phil Flynn today at 312-264-4364

View The Energy Report

A Subsidiary of Price Holdings, Inc. – an Employee Owned 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. ©2017


The only place where you can get the Power to Prosper! Our energy webinar lays out exactly why Brent oil hit a two-year high. Find out why and where we are going next Call 888-264-5665 or email me at



Recent articles from this author

About the author

Mr. Flynn is one of the world's leading energy market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets.

Phil Flynn's accurate and timely forecasts have come to be in great demand by industry and media worldwide. His impressive career goes back almost three decades, gaining attention with his market calls as writer of “The Energy Report”.

He is a daily contributor to Fox Business Network where he provides daily market updates and analysis. Phil’s daily commentary is also featured in Futures Magazine, International Business Times, Inside Futures, 312 Energy, Enercast, among many others.

Phil is a lifelong resident of Illinois. He attended Daley College in Chicago before beginning his career on the trading floor of the Chicago Mercantile Exchange which eventually led him and his team to The PRICE Futures Group.

Media highlights include: The President of the United States, Bloomberg, ABC, CBS, NBC´s "Today Show" and "Nightly News with Tom Brokaw", CNBC, CNN/CNNfn, FOX´s "O´Reilly Factor", PBS´s "The Newshour with Jim Lehrer" and "Nightly Business Report", MSNBC´s "The News with Brian Williams", The Wall Street Journal, Business Week, Investor´s Business Daily, The New York Times, The Los Angeles Times, Chicago Tribune, Associated Press, The Toronto Globe & Mail, Houston Chronicle, Futures Magazine, Inside Futures, and National Public Radio.

Contact Phil Flynn: (800) 769-7021 or at

Published by Barchart
Home  •  Charts & Quotes  •  Commentary  •  Authors  •  Education  •  Broker Search  •  Trading Tools  •  Help  •  Contact  •  Advertise With Us  •  Commodities
Markets: Currencies  •   Energies  •   Financials  •   Grains  •   Indices  •   Meats  •   Metals  •   Softs

The information contained on is believed to be accurate but is not guaranteed. Market data is furnished on an exchange delayed basis by Data transmission or omissions shall not be made the basis for any claim, demand or cause for action. No information on the site, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any futures or options contracts. is not a broker, nor does it have an affiliation with any broker.

Copyright ©2005-2019, a product. All rights reserved.

About Us  •   Sitemap  •   Terms of Use  •   Privacy Policy