RE:RE:RE:RE:And there it is...Nice Santa Claus rally today. Another effect on oil supply will be Russian exports falling due to a lack of western extraction expertese, sanctions, shipper hesitancy and withdrawl of insurance. News out today suggests Russia will cut production to support the price of oil but it is more likely that the above events are causing a loss of production.
Front month futures are still in contango but will approach backwardation 2-3 months out. The heavy discount was $12 when SPR releases began and took the biggest hit to $30. There is no reason to doubt a return to a $12 discount as the heavy oil season starts in spring with paving weather.
Today was the biggest tax loss selling day in history. With a year of bull market behind us, there is no good reason for fund managers to avoid oil stocks and this correction gives a good entry point for the new year. The January Effect of buying back in from tax loss selling may be good to oil stocks.