Should auld bear markets be forgot and never be recalled. Should auld bear markets be forgot, and a new year with bullish signs!

Never mind a bear market for oil as it posts an impressive gain going into the New Year, breaking its two-year losing streak. Crude oil is on track for its biggest annual gain since 2009. And while the market saw a rocky road to get to this point with wild swings and at times historic volatility, the surge into the end of the year may have set a low in oil that could last for years.

The last time oil prices had back to back down years was in 1998 and 1999. Crude oil went from an end-year price of $12.78 to a high of $37.00 before ending the year at $25.75. This year per Reuters, Brent futures have risen about 53 percent while WTI futures have climbed around 46 percent. The 2016 gains in the oil market were the best since the 2009 rally when Brent and WTI rose 78 percent and 71 percent respectively. The 2009 rally of course, was after we saw prices crash after the start of the "great recession”.

I have been consistent stating that I believe this year’s oil market is like of the bottom in 1998 and 1999 and that set the stage for an eight-year rally. On top of that, the way we saw the bulls and bears fight it out at the end of the year, the bulls have won and that means the bears will start to go into hibernation in the new year.

Reduced spending in CapX has taken its toll as we saw drops in oil production and this year, the first drop in natural gas production since the start of the shale gas revolution. We have seen clear signs that the cycle has changed as low prices have sparked strong demand in the US and demand has well-exceeded oil bear beginning of the year expectations in both China and India. To cap it off, there has been the first OPEC and non-OPEC accord since 2001 which also correlates to the bottom in oil that was set in 1998-1999 which means that we should see a solid up trend in oil going into the new year. Even the long-term technical traders are calling for higher moves as chart formations look very bullish. Now with the economic optimism that surrounds a Donald Trump Presidency, the odds are that oil demand should leap as we go into the New Year is looking very strong. The bears must change course and get out of their oil glut mindset and instead focus on demand outstripping supply.

Of course yesterday The Energy Information Administration (EIA) reported that crude supply surprisingly increased by 613,999 barrels. This came as US oil production fell for the second week in a row. We saw real strong demand for gasoline and a slight drop in refinery runs causing a 1.59 million barrel drop in gasoline supply and a 1.88 million barrel drop in distillates.

Gasoline prices at the pump will be on the rise as we are seeing tight supplies of butane and ethanol. U.S. ethanol inventories hit a near six-week low, falling 2% from the previous weeks. Along with a strong demand for gas and tight blending components, retail gas prices should continue its recent rise.

Natural gas almost hit a record after the EIA reported a 237bcf draw missing the record by just 3 bcf. The market saw some profit-taking after the report but it is increasingly clear that the structural problems in this market that we have been talking about are becoming more apparent. Natural gas could be the hottest commodity going into the new year!