Oil prices are swinging headline to headline as most cannot decide whether the oil market is oversupplied or undersupplied. Oil was recovering dutifully on reports that the Saudis were “mad as heck” and that they weren’t going to take it anymore and with cut production. Talk that the Saudis, angry at President Trump for misleading them on Iranian oil sanctions would now cut exports of oil to the U.S. and engineer a 1.4-million-barrel production cut at the December 6th OPEC meeting.

Then oil suddenly reversed course on light volume and got slammed when the Russian oil Minister Alexander Novak said not so fast. Mr. Novak is a bit worried about reversing course on oil production so quickly because the Saudis are angry and would prefer the cartel “make a balanced decision”, and while many in the market are fearful of being oversupplied, there are others that see the market as being undersupplied. Mr. Novak would prefer to wait until the meeting to make a final decision on cutting output because at this point, he says that  ”so far, there are no criteria for it.”

Now he may be saying that because the Russians are pumping a record amount of oil and like their spot vying for the world’s top producer or they realize that going into winter they will see their exports fall as they keep their oil for domestic production. Besides, it is not just the Russians that think we need those extra barrels of oil, it is the International Energy Agency (IEA). IEA Executive Director Fatih Birol said Monday at a conference in Slovakia. Longer term, “cutting the production significantly today, by key oil producers, may have some negative implications for the markets." In other words, tight supply and higher prices.

But oil surged back after there was a report that the EU may be getting tired of Iran’s antics on the world stage and may actually join the U.S. in taking a tougher line on Iran. MarketWatch reported, “Oil prices ended higher on Monday, finding support from news that the European Union backs a decision by the French government to sanction Iran nationals linked to a bomb plot in France.” “Oil traders are now pricing in the possibility that the EU will join the U.S. in taking a tough stance on Iran, and maybe this time there will be no waivers or a way for Iran to sneak out [oil] supply,” said Phil Flynn, a senior market analyst at Price Futures Group. Reuters reported Monday that EU ministers said technical work could begin on an asset freeze, on two Iranians and the Iranian intelligence service, over a failed plot to attack a rally near Paris.

Oil traders today will also await the report from The American Petroleum Institute, which could mark the top of oil supply going forward. Reports from private forecaster Genscape showed that storage in the hub was  37,685,977 million barrels, down 478,572 barrels from last week. Crude draws should accelerate as some of the biggest refineries are coming out of maintenance.

Peace in Yemen? Zerohedge is reporting that “The prospect for peace - or at least a lasting ceasefire - is advancing rapidly following a surprise weekend proposal by Yemen's Houthis to halt all attacks on Saudi coalition forces. On Sunday the head of Yemen's Iran-backed Houthi Supreme Revolutionary Committee Mohammed Ali al-Houthi, said "We are willing to freeze and stop military operations" — something which now appears to have taken effect, according to a breaking Reuters report. In the biggest turning point in the war which has raged since 2015, Reuters confirms: Houthi rebels in Yemen said on Monday they were halting drone and missile attacks on Saudi Arabia, the United Arab Emirates and their Yemeni allies, responding to a demand from the United Nations.

Near record cold in the Northeast for Thanksgiving should support natural gas and heating oil. Downside pressures today are just fears surrounding the stock market. We believe that we will see a sharp recovery in price as it becomes clear that supplies will start to draw down fast. The Weather Channel says that another blast of cold air is expected to bring one of the coldest Thanksgivings on record for some Northeast cities. A strong area of high pressure from the Arctic Circle will descend southward across Canada and into the Northeast, sending temperatures plummeting toward levels you might expect on New Year's Day, not Thanksgiving Day.