Oil prices have been swinging up and down seemingly without reason. This volatility will continue in the short term, but the foundation for long-term price stabilization is being laid behind the scenes.
- Where the Oil Price "Yo-Yo" Is Heading Next
- A Single Country Now Controls the Future of Oil Prices
- Three Energy Sector Shifts That Emerged from the Dungeons of Windsor
- The Oil Sector's "Other Shoe" Just Dropped
- The Elephant in the Oil Market That No One's Talking About
- Three Pressing Energy Investing Questions, Answered
- The Truth About the Big Oil Production Freeze
- The Final Step Needed for Oil Prices to Recover
- Saudi Arabia's Oil "Proposal" – Here's What's Really Going On
- These Are the Three Reasons Why U.S. Oil Production Hasn't Declined… Yet
- Negotiations Over Oil Production Broke Down – but Not for the Reasons You'd Think
- How a Surprising Alliance Could Shake Up the Oil Sector
- Why Oil Production Is Increasing, Despite the Oil Glut
- Why Are Gas Prices So Low?
- Will OPEC Cut Production?
- How Much Oil Does the U.S. Have Compared to Other Countries?
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.
Every March at Windsor Castle, leading global energy figures come together for the Windsor Energy Consultations.
Now, I'm not allowed to say who said what at the meeting this year. But that same rule also makes everyone be very frank in their discussions of energy.
This led to some very revealing discussions... and to agreement on the three most important shifts changing the energy sector right now.
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.
The pundits have been hammering away at how much excess supply there is worldwide. Yet that alone is not the market's only problem.
Given the action that has taken place in the sector over the past several months, I haven't had the opportunity to sit down and answer your many energy investing questions.
So let's do that today. First, many of you have asked about the status of liquefied natural gas (LNG) exports from the United States and how that will impact the global market.
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.
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.
Last week, Russian Energy Minister Alexander Novak claimed that Saudi Arabia had proposed a 5% cut in oil production.
That set the oil price roller coaster off and running, with crude prices shooting up to levels not seen in a month.
There is only one problem. My contacts in OPEC and Saudi Arabia tell me that things look very different behind the scenes.
Over 2015, a persistent surplus in oil production has offset significant cuts in forward capital commitments and a decrease in drilling - the number of drills in the field is now less than one-third of what it was when the slide began last year.
But U.S. oil production has remained high, despite a clear contraction in operations. This is perhaps the least understood event of the past year.
In the UAE's oil capital of Abu Dhabi, OPEC and Russia have been negotiating a coordinated cutting of oil production, which would lead to a movement up in global crude prices.
Unfortunately, any anticipation about these meetings was effectively negated over the past few days by three unexpected factors.
Events in Abu Dhabi Friday point to OPEC having a brand-new ally in the oil sector - one no one would expect...
This unexpected partnership could have a massive impact on oil production moving into 2016.
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.
Why are gas prices so low right now?
The average price of regular unleaded is hovering around $2.40 a gallon - almost a dollar less compared to a year ago.
Yesterday, OPEC released a bulletin saying low prices "remains a cause for concern" and OPEC is "ready to talk to all other producers."
The news has investors wondering: Will OPEC cut production?