Oil Tops $70 For First Time Since 2014

As WTI crude futures top $64.50, amid what looks like a stop-run over $64. At the same time, Brent crude futures spiked above $70 for the first time since Dec 2014.

As Citi notes, just before the London open, Reuters, citing the UAE energy minister said that OPEC would commit to a supply deal for all of 2018.  WSJ also rehashed higher Street forecasts, which have been coming in since the end of 2017.

Investors have piled into commodities markets in the last month as the most bullish oil market structure in years is buttressed by OPEC-led production cuts, strong global economic growth and a softer U.S. dollar. 

WTI hits $64.50...


And Brent tops $70...



To its highest since Dec 2014...


As Bloomberg reports, for many investors, it’s all about backwardation.


As oil supplies have tightened, near-term contracts have become pricier than later-dated ones. That market structure makes it profitable to hold onto a long position, as each month investors roll into cheaper contracts further along the curve. Last week, the nearest Brent futures were trading at their biggest premium to those for a year later since 2014.

“Being long oil gives a positive annual return, even if oil stays flat,” said Giovanni Staunovo, a commodity analyst at UBS Group AG. “The last time you could say that was in 2014.”

Additionally, the global macro-economic picture is also supporting prices. While surging economic growth helped demand to soar in 2017, the U.S. dollar slid through most of the year as other global economies fared better. With the typical inverse link between crude prices and the dollar taking hold once again in the second half of the year, oil got another shove.

However, there are plenty of technical warning signs flashing red. Both Brent and WTI have closed in overbought territory in recent days, while a major Fibonacci retracement level sits at about $71.40 for Brent, should the psychologically key $70-a-barrel marker be pierced. As a result, “$70 to $72 a barrel looks toppish in the short-term,” Hewson said.


wmbz Thu, 01/11/2018 - 11:42 Permalink

This is great!

Here in S.C. we have our first of many more gas new tax increases to come. (To fix our shit roads) but it won't be enough of course.

Hopefully oil can get back above $100.00 soon and gas back to $4-$5 dollars a gallon!

That will be wonderful.

NoDebt wmbz Thu, 01/11/2018 - 11:48 Permalink

"(To fix our shit roads) but it won't be enough of course."

Because they won't use most of it to fix the roads.  They'll spend it on more important stuff.  PA pulled the same shit a few years back.  Didn't fix a single pothole despite us now having the highest gas taxes in the nation.  Oh, and the Philly soda tax to provide more "services" to children?  90% of the revenue generated by that tax went to things OTHER than that.


In reply to by wmbz

coast1 skbull44 Thu, 01/11/2018 - 13:02 Permalink

I find many people on zerohedge are invested in a certain commodity..They will say BS to government statistics when their investment is down, and/or be glad oil is up because they are invested in it even tho higher gas prices hurt most americans..I find people who invest, would basically sell their own mother, as long as their investment went up.  There is a scripture that says, a man build many barns to fill, but one night, his soul was required of him. Most people I see here on zerohedge are soul-less..And whats funny?  they even admit it and are proud of it.

In reply to by skbull44

wise_owl_says... wmbz Thu, 01/11/2018 - 12:47 Permalink

yes get oil and gas (ground rot blood) prices up but leave silver price same. absolutely love a manipulated perpetual blue light special on most precious commodity in world. amassing a hoard to last centuries, so many different ongoing boating accidents! keep HODLing and playing into see-eye-aye ponzi scheme of millenia my plebodies.  

In reply to by wmbz

LawsofPhysics Thu, 01/11/2018 - 11:44 Permalink

Let's be honest, discussing the "price" of anything in the absence of a mechanism for true price discovery is a fool's errand.

Ask yourself, what can I do or make of real value with consumable calories and reduced hydrocarbons?


tion Arnold Thu, 01/11/2018 - 12:39 Permalink

>Return is kinda slow though.

So much potential beyond mature timber going untapped though.  

Even the garbage baby trees that need cleared and branches, some people are zinging them up into disks and selling them to crafters/decorators for decent money on Etsy lol.  

In reply to by Arnold

yogibear Thu, 01/11/2018 - 11:50 Permalink

Trump wants a much lower dollar and inflation. Deficits going to the moon. You thought George Bush was good for commodities, you ain't seen nothing yet.

tahoebumsmith Thu, 01/11/2018 - 12:02 Permalink

Industry is " rigged" just like everything else. Hybrid and electric vehicles at all time highs, solar is booming, battery technology full speed ahead, ban on off shore drilling lifted yet oil prices go up?

Seems like everything these days defy supply and demand economics. 

buzzsaw99 Thu, 01/11/2018 - 12:06 Permalink

zhers cheer when gold & bitcoin go up but whine like a bitch when oil goes up.

You're breakin' my heart

You're tearing it apart

So fuck you...

[/Harry Nilsson]

Hubbs Thu, 01/11/2018 - 12:08 Permalink

Unbelievable the stock market keeps skyrocketing, PMs get suppressed, and now oil is getting into the act of blatant price manipulation.

They can't let the price of oil go too high, otherwise,  the high price will starve the energy dependent  economy and reflect the falling value of the petrodollar.

Yet they have to keep the price up to save the shale oil companies, and the banks that have made loans to them.


Underneath it all, the shale oil companies might be drilling furiously to get as much oil as quickly out of the ground to sell at these manipulated high prices to pay their debts and keep the banks solvent. But at the same time, being subjected to normal market forces, the price should go down when the unexpected temporary pig-in-a-python glut passes through.


Finally, in a memory back to the good old days of Norman Rockwell with the boy and girl on a sundae date at the deli, when you stick more straws into the sundae , you drink the sundae that much faster, same way as you hit the sudden slurping sound when your shale oil field  goes dry in one year instead of three because you have sunk so many wells to maximize the rate of recovery.   The Seneca Cliff crash of sudden depletion.


If the whole world economy isn't totally screwed up by the elites and central banks etc., I don't know what is. 



adr Thu, 01/11/2018 - 13:25 Permalink

I wouldn't mind $70 oil if it meant gas selling at $1.80 like it used to at that level.

I'm paying $95 barrel prices at the pump. Not to mention the new $.55 gap between regular and premium. 

When regular was $3.65, premium was $3.85. The station down the road has regular at $2.69 and premium at $3.25.

NoWayJose Thu, 01/11/2018 - 13:26 Permalink

WTI gets a 10 million barrel draw and that drives prices up due to ‘demand’ - while gasoline and distillate inventories go up almost as much - and get ignored.  Refiners are using cheaper stored oil and turning it into expensive refined products faster than demand is increasing.  This can only go on for so long.

Ben Tornilloed MK ULTRA Alpha Thu, 01/11/2018 - 16:45 Permalink

Refiners typically build inventory now to prepare for turnarounds and maintenance starting in the next month and a half.  Venezuela dropped 500,000 BOPD on average last year.  Soon going to zero.  The US is now below the 5 year average on inventory (granted the last three were damned high).  The resource companies were able to ramp up production with zero interest money.  While debt and equity money is still available for good resource trends, calling yourself a resource company does not guarantee financing (unless you add crypto somewhere in your name).  There are legitimate reasons for oils recent ascent. 

In reply to by MK ULTRA Alpha