Cut down the barrels, reduce the crude stocks before the prices fall again. Tankers start docking. We may be rushing things but, stocks need to fall again now. Because we need a little price hike, right this very minute, raise the Platts window, don’t care how you spin it, yes we need a little price hike, right this very minute. With Trump in office, the view is blurry so to raise prices, dear, we're in a hurry.

Oil prices rise again as signs of compliance from Iraq overshadows the resumption of oil loadings from Libya. Also, a report from the American Petroleum Institute is showing US supply tightening as President Obama makes a radical move to an indefinite ban of some offshore drilling that he says is a present to our children. So I guess if you did not get your kids a gift your can tell them that the Obama drilling ban will have to do. Now how do I wrap that. Merry Christmas! And you thought the President wasn’t going to get you anything.

Before we explore the long term ramifications of the President’s oil drilling ban, lets talk about what is driving oil today. The market yesterday was rallying early, on strong demand expectations as the US stock market failed just short of 20,000 Dow! We also priced in a delay of Libyan exports as a deal to resume exports over the weekend fell apart. But a report yesterday that Libya actally loaded a ship for exports cut gains for the market. Bloomberg reported that a tanker arrived at Libya’s largest oil port to load the terminal’s first cargo since it was closed two years ago, while armed groups vie for control of its energy wealth. The vessel Alicante arrived Monday at Es Sider port and will sail for Italy after loading about 600,000 barrels of crude, Adnan Omran, general manager of Al Omran International Maritime Agencies, said by phone. The ship hasn’t started loading yet due to bad weather, he said.The cargo was scheduled initially to be loaded on to a different tanker, Seamusic, but the vessels were changed in the last few days, Omran said Tuesday. Libya’s Lana news agency reported on Dec.17 that Seamusic had already loaded 80,000 tons of oil and left for Italy, without saying where it got the information.

But a report later about Iraq telling customers to expect less oil brought some buying back. Iraq, if you remember, originally wanted to be exempt from production cuts. Another reluctant OPEC member telling customers to expect less oil is another strong sign that compliance to this production cut may be among the best compliance rates in OPEC history. Bloomberg News reported that Iraq told buyers of its crude that exports will drop to meet its commitment to OPEC. The country has, “firm and applicable plans to cut daily crude-oil exports by specified percentages to meet the total cut of 200,000 to 210,000 barrels a day during the first half” of next year, the state marketing company known as SOMO said Tuesday in a statement. Baghdad finally agreed to cut 210,000 barrels a day from 4.56 million a day in the six-month accord starting January first.

Yet what seemed to solidify gains overnight was the report on supply from the American Petroleum Institute that reported US crude supply fell by a whopping 4.15 million barrels. The report also a showed a bullish 1.55 million barrel drop in crude supply and a bullish 1.55 million barrel drop in gasoline supply. The only bearish aspect of the report was a small 69,000 barrel increase in Cushing, Oklahoma where we have seen supply rising week after week.

President Obama’s Christmas present to future generations is to exploit a 1953 law, the Outer Continental Shelf Lands Act, to “permanently” ban offshore oil and gas drilling along wide areas of the Arctic and the Atlantic Seaboard. He had Canada join his ban but they only will do so as a pause. This is a last minute deal trying to go around Congress to cement his legacy as the anti-climate change President. The oil industry will say this is short sighted and will restrict drilling and reduce National Security. The 1953 law to bar offshore drilling permanently is, “An obscure provision that’s been used to preserve coral reefs and walrus feeding grounds empowers presidents to exclude waters from future oil and gas development.” This may put the US at a disadvantage if they ever want to lift the ban quickly. Canada has given themselves an out. Russia is already planning on drilling in the Artic. We will have less control of the environment if we are not part of the process. Instead of the global warming President he has been the anti-energy security President.