Oil Rally Confirmed, page-10

They are Sircorp because they can land the discounted crude cheaper in the gulf then bring it in from inland US (and it better suits the gulf refineries)........ None of this helps the bigger picture though because so much of the US stuff is taking up the storage and traders keep buying it and putting it in storage - the storages fill - then no more room then it has to be discounted to move it on - then the POO goes down... as sure as night follows day the storages will keep filling UNTIL production drops right off and the only way that can happen is via agreement - shalers are not dropping by over a million barrels day in the short to medium term - the glut will continue - if world demand picks up this scenario will shorten but as can be seen from the ECB moves - there's not a lot of confidence in the world economy right now so it comes back to production cut - and the hot air going around at the moment is for a production freeze via a supposed meeting....

ST outlook for oil is not good now matter how we look at it - the shalers needed to drop off meaningfully from late 2015 as we hoped they would - they didn't, it was hoped that by now we'd be seeing the possibility of a 1 million barrel decline - but we're yonks away from that possibility and heading into another surge of production in Q2 instead.