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The Energy Report

The Energy Report

Phil Flynn
http://www.pricegroup.com/
pflynn@pricegroup.com


The Energy Report 02/13/18

The Last Hedge Fund Standing

Oil Hedge funds continue to run for the exits and is in part responsible with yesterday's late day swoon. Yet, despite market turmoil the supply versus demand fundamentals for oil continue to be very bullish. Even the International Energy Agency (IEA), that hates to say anything bullish about oil, is acknowledging that despite their prior doubts that OPEC and their Non-OPEC coconspirators have succeeded in removing the global oil glut.

The IEA was once again to raise its forecast for oil demand growth in 2018 to 1.4 million barrels per day, from a previous projection of 1.3 million bpd. Yet they acknowledge that oil demand grew at a rate of 1.6 million bpd in 2017 so they expect a demand drop even though global growth is stronger than it was last year.

As I have written before the IEA seems to always have to raise their demand forecast because they generally underestimate demand. Perhaps it is because they represent the consuming nations and they do not want to say anything that may raise prices.

The IEA was widely criticized for their pronouncement that shale oil production would explode, which of course is a little too hyperbolic for a major agency to say. In this report they toned down their rhetoric but still said that "U.S. producers are enjoying a second wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth." Yet, because they always underestimate demand they will be wrong again. If they were right in their previous forecasts, then global inventories would be rising, not falling globally by the fastest rate in almost 6 years.

We think that oil is poised to move higher! The hedge funds have been mostly shaken out and the reality of falling supply and surging demand will help us find a base for the next leg higher!

Make sure you are getting the best in business! Watch the Fox Business Network! Call to get my latest trade levels at 888-264-5665 or email me at pflynn@pricegrouop.com.

There is a substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. 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 commodities. PFGBEST, its officers and directors 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.

Phil 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's market commentary, fundamental and technical analysis, and long-term forecasts are sought by industry executives, investors and media worldwide.

PLACING CONTINGENT ORDERS SUCH AS "STOP LOSS" OR "STOP LIMIT" ORDERS WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS. SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS.

Past performance is not indicative of future results. 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 commodities. Alaron Trading Corp. its officers and directors 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.

Contact Phil at 1-888-264-5665 or pflynn@pricegroup.com.