A ceasefire in the Ukraine and a surprise interest rate cut in Sweden is giving oil a boost even in the face of massive supply. Even as many crude oil analysts tries to out-bear the next guy there are signs that a bottom in oil may be forming.
Cheap crude oil prices mean less money spent on supply. This also gets a boost with more crude being contracted from US production and that cuts spending on transpor- tation cost. Some will argue that refining margins are not close to record highs, but I’ll tell you that demand has never been better.
This week the three main forecasting agencies (EIA, IEA and OPEC) all released their forecasts for 2015. All three reports were relatively consistent with each other in that they all indicated that oil production is unprofitable and already starting to be cut and will likely continue to be cut as long as prices remain depressed.