After a hefty rise of 46.9% for the month through close last Friday, WTI crude fell for two consecutive sessions to start the week.
As always, pundits with no real experience in the industry will blame the "glut" - but excess supply on its own is not responsible for today's oil conundrum.
Instead, the key factor in how people regard the market and anticipate oil prices today is guaranteed excess supply.
And the actions of a single country will now decide whether that guarantee will remain...
After a hefty rise of 46.9% for the month through close last Friday, WTI crude fell for two consecutive sessions to start the week.
As always, pundits with no real experience in the industry will blame the "glut" - but excess supply on its own is not responsible for today's oil conundrum.
Instead, the key factor in how people regard the market and anticipate oil prices today is guaranteed excess supply.
And the actions of a single country will now decide whether that guarantee will remain...
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The "other shoe" is dropping for the oil sector, and it's going to affect each and every one of us.
This ripple effect will extend to much more than just oil and gas.
Common sense suggests that some signals would affect both oil prices and the stock markets.
But that's not what we've been seeing lately. The two have instead been moving in almost lockstep connection. When one moves, so does the other, no matter the reason.
It seems common sense isn't in charge of the markets any more. Here's why...
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The pundits have been hammering away at how much excess supply there is worldwide. Yet that alone is not the market's only problem.
With word swirling about Russia and Saudi Arabia agreeing to freeze oil production, the talking heads are up in arms about whether it will make any difference or not.
On the table is an accord to keep production at January levels, with most of OPEC probably following Saudi Arabia's lead.
In the short term, getting Iran on board is key. Today, meetings took place with Russia, Saudi Arabia, Qatar, and Venezuela on one side of the table, and Iran on the other.
Energy demand worldwide is increasing, even according to the latest IEA report. And historically, this is the quarter of the year where the demand figure is the weakest.
In fact, in each of the last several years, the IEA has cut demand estimates in the first quarter only to increase them multiple times later in the year.
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The International Energy Agency's (IEA) report on global oil demand projections, combined with the continuing oil supply glut, pushed oil prices below $30 a barrel.
What we have here is the classic balance of supply and demand. Here, the levels of investment and investor interest in oil and natural gas companies follow a simple logic.
When supply exceeds demand, investors lose interest and prices fall. On the other hand, when demand outgrows supply, investors go back in, raising prices.
But these days that dynamic has been fundamentally altered - half of that equation is no longer in question.
And that leads us to the final step needed for oil prices to recover...
Oil "sages" everywhere are now calling for $40 to $50 a barrel of oil by mid-year, calling on vague rumors of a Saudi-Russia production deal, costly shale oil producers collapsing, or the energy debt crisis as proof.
But they're overlooking one crucial thing - the main signal that oil prices are turning around. You see, the largest move of its kind ever just took place in oil markets... $600 million worth in one day.
With major events unfolding in the Persian Gulf, 2016 is starting out as a dangerous year.
The next phase in the region's conflict is now underway and is already impacting crude oil prices.
And even before the events of this past weekend, opposing forces now require more than bread and circuses paid for with oil revenue.
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We could see an unprecedented Russia-Iran oil deal unfold right before our eyes. The two countries met recently to talk export and trade agreements.
We're not sure how most major media outlets missed this alarming news, especially since such a deal could result in Russia's access to the world's most competitive market.
Here's where the "oil swap" could take the Kremlin's crude supply...
Despite weekly declines in the number of working rigs in the American market (now at the lowest levels in some six years) and rising cuts in capital commitments for new projects, the market surplus in oil is once again rising.
Crude oil prices are languishing in the face of what is projected to be another build in U.S. production stockpiles.
Another Saudi official is trying to downplay the kingdom's expanding deficit - as their problems get worse...
On Saturday, Foreign Minister Adel al-Jubeir maintained that the current situation was manageable. He was speaking at a conference in Manama, the capital of neighboring Bahrain.
The situation, of course, has been sparked by two Saudi-led decisions within OPEC. The first was to defend global market share by keeping production high (a move made last year while Americans were sitting down to their Thanksgiving turkeys). That started a downward slide in global oil prices.
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The House of Representatives just voted to approve a budget deal to raise the U.S. debt ceiling.
And buried in this last-minute accord designed to save us from another government shutdown is a provision to sell oil from the Strategic Petroleum Reserve (SPR).
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In its monthly report released on Monday, OPEC indicated it is now willing to discuss production levels with other non-OPEC countries.
This is the first indication that the low crude oil price environment has been creating serious problems inside the cartel.
Here's what that means for OPEC's production strategy... and the oil market as a whole...
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The world oil market is typically dominated by countries with the most land.
The three largest countries - Russia, Canada, and China - are among the top five largest oil producers in the world.
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