Crude oil prices are dead with rig-or mortis or the adding of oil rigs weigh on market sentiment. Shale producers are expected to continue leverage up to the hilt with some producing the type of oil that no one really wants with a hope that prices do not crash and drive them into bankruptcy. The confidence of the shale producers comes from OPEC which is astounding the world by adhering to production cuts. Yet despite the oil market weakening in for 6 days in a row, this bull market is far from over. Just a little over a year ago oil was at $26 a barrel and they were telling you it was going to $10. Then they told you that oil was in a new era of low prices and some said it would never trade above $40 again. This bull market is far from dead despite recent weakness.

  Yet if you have gone to the gas pump lately you know all is not well in oil land. Product inventories continue to tighten driving up gasoline prices with them. Triple AAA reported that yesterday’s national average price for a gallon of regular unleaded gasoline is $2.42, which is an increase of 13 cents over last month and 29 cents more than this time last year.

They say that as gas prices continue to reach new heights and hit an all-time high for the year, the summer demand has not kicked in, meaning consumers can expect the price at the pump to continue to rise for coming weeks.

Based on recent American Petroleum Institute (API) reports, U.S. gasoline deliveries in March were the second highest March deliveries ever recorded, confirming the forecast that demand is on track for the summer.The API report was supportive as total petroleum deliveries in March moved up 0.2% from March 2016 to average nearly 19.7 million barrels a day. These were the highest March deliveries in nine years, since 2008. For the first quarter of 2017, total domestic petroleum deliveries, a measure of U.S. petroleum demand, were up 0.4% compared with the first quarter of 2016 to average 19.5 million barrels a day. These were the highest first quarter deliveries since 2008.

Energy demand is also strong as the U.S. manufacturing sector continues to expand and the U.S. job market continues to improve. The level of condensate also is going into storage but U.S. refiners are looking for heavy, meaning that they may stay in storage for a while.

You must keep the long-term vision for oil. Shale producers can’t afford a price drop. U.S. market demand will rise. Global demand will exceed expectations. We still look for oil to rise from the dead in the coming weeks if not today.

The lumber market has been on fire ahead of Donald Trump’s tariff on Candela lumber. The Canadians have already been raising prices as this tax is going to be retroactive.