Crude Price Rout Continues In Face of Stark Fundamentals

Continued bearish report from RBN at the link.

The latest short-term energy outlook (STEO) published this month (January 2016) by the Energy Information Administration (EIA) lays out the oversupply story underling current crude oil price weakness in its forecast out to the end of 2017. The data shows world crude production (supply) in Q1 2016 is still greater than demand – to the tune of about 0.9 MMb/d – meaning that surplus crude is adding to inventory stockpiles every day.

The Downward Spiral - Crude Price Rout Continues In Face of Stark Fundamentals - #crudeoil - RBN Energy https://t.co/pYt4hAPWah

— Rusty Braziel (@RustyBraziel) January 19, 2016

The stuff continues to pile up.  Some ancedotal evidence perhaps but  I do some personal travel withing the Delaware River basin and have noticed an abundance of oil carrier cars stuffed back up into unused rail lines in the basin and have been sitting there for months I assume full of oil (don't know for sure).

This photo of a miles long train of oil cars pushed up into the Lehigh river gorge north of Lehighton, PA sitting there for months this fall:

And this miles long train of oil cars pushed up the Schuykill river at  Hamburg, PA also sitting there for months this fall:

And don't have a picture of it but I've seen another miles long train of these oil cars sitting on an old branch line off the PA mainline north of Lancaster, PA also just sitting there for months.

Much oil is out of the ground just sitting anywhere they can find a place to stash it.  As much if not all of this oil inventory is probably financed in USDs, this situation of over-supply and continued weaker prices in USD is continued bullish USD vs. currencies of oil export nations as the US enjoys the increased real terms of trade of the ever cheaper imported oil.