The stars are beginning to align again for oil | Forexlive

5) Russia woes

On Friday, Russia announced it was curtailing 500,000 barrels per day of production for the month of March. They tied this to the products ban that went into effect on Feb 5 and said it was temporary but it’s tough to believe anything from Russian officials right now. It could be that sanctions are biting and technology is tougher to find. What’s not hard to believe is that we’re in an energy war.

6) SPR is out of the picture

The 1 mbpd in releases from US reserves are over. Some production has stepped in to fill the gap but the mantra from oil companies continues to be discipline and shareholders punish companies that spend.

7) Natural gas associations

The rug-pull in natural gas prices will serve as a warning sign for oil companies. Gas prices were filled with $$4-5 decks as far as the eye could see and now it’s trading at $2.40. That will harden supplier discipline but it will also take physical barrels off the market as gas drillers dial down production and the barrels from gas-heavy production disappear.

8) Watch the dollar

What could quickly send oil higher would be a stumble for the US dollar. Right now, that could go either way, particularly with CPI coming out on Tuesday. Normally, better global growth is bad for the dollar but we could also be near a time when the Fed signals rates rising even higher than 5.5%.