In fact, the oil price rose along with demand until we saw a separation from that relationship as the mortgage crisis developed.
And you'll remember that Andurand Capital Management, a hedge fund manager, recently said on Bloomberg TV that $300 oil wouldn't be impossible. That data point is worth emphasizing: OPEC has claimed for more than a year that it was trying to erase the inventory surplus, and at least according to IEA data, that mission has now been accomplished. But no, it's doing the exact opposite. This compares with 340 million barrels when OPEC, Russia, and several other producers agreed to cut production to stimulate prices. One technical analyst told The Fuse that $100 is "in play" and may be reached just in time for the Saudi IPO in 2019.
But it's not only about supply.
OPEC's success with the oil production cutting deal has been to a significant extent aided by Venezuela's catastrophically dropping production as the country grapples with foreign exchange shortage, US sanctions, and a devastating economic crisis. China's crude oil imports in the first quarter increased by 7 percent on the year to around 9.09 million bpd-a rise of nearly 595,000 bpd on average compared to Q1 2017, according to Reuters calculations. However the IEA - which advises oil-consuming nations - has warned that prices are high enough to hurt consumption, and trimmed its forecasts for demand growth.
"Looking into the next 18 months, we expect global oil supply and demand balances to tighten, driven by the ongoing collapse in Venezuelan output", the report said.
Any increased tension in the Gulf could lift Brent as high as $80 or more per barrel this year.
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This was the case with Drill, Baby, Drill the slogan, which proved to be popular and gained further prominence after it was used by Republican Vice Presidential nominee Sarah Palin in her debate with Joe Biden in the 2008 US Presidential elections. "Organisation for Economic Co-operation and Development (OECD) commercial stock levels have been adjusted from a peak of 3.12 billion barrels in July 2016 to 2.83 billion barrels in March 2018, corresponding to a drop of 300 million barrels".
Brent crude futures were at $78.23 per barrel at 0445 GMT, down 20 cents, or 0.3 percent, from their last close. Active units there increased by five this week to 463, the most since January 2015.
Global inventories of crude oil and refined products dropped sharply in recent months due to robust demand and production cuts by the world's top producing countries. You could buy the fracking ETF, VanEck Vectors Unconventional Oil & Gas ETF (NYSE: FRAK), or the gasoline price ETF, United States Gasoline (NYSE: UGA).
Chinese executives did not make firm commitments but said as state oil companies they will fall in line with Beijing's wishes, the person said.