Shale Sunset Crude oil’s fundamentals don’t support further gains from here. Oil markets are currently near an equilibrium, and the situation is likely to continue, unless the supply outages are sorted out. The rumors about a likely production freeze by OPEC and Russia brought the oil bulls out from hibernation in February 2016. Since then, oil has been on a tear supported by a higher demand than previously anticipated, as well as various supply outages across the globe. However, the current rally is at the critical resistance level of $50 per barrel (b), as shown in the chart below. Only strong fundamentals would justify an oil price increase from here. Can the rally continue higher toward the next level, at $60/b? Analyzing the demand and supply situation will help determine if this is possible. (Click to enlarge) Demand In its April Short-Term Energy Outlook (STEO), the EIA forecast oil […]