Here’s the big problem with oil. The commodity’s fundamentals simply have too many cracks in the foundation to support higher prices. U.S. production continues to grow, surpassing 10.25 million barrels, and I expect another jump in rig counts this week.
Last week, we saw an increase of 26 oil rigs, to 791 — the highest level since 2015. One result from increased production could be a series of weekly inventory builds from the Department of Energy, and we could see a massive unwinding in speculative positioning, currently near the highest levels since 2006.