In late 2016 OPEC engineered significant oil production cuts in order to address an oversupplied oil market. Global crude oil inventories had reached record highs, and the price of oil had crashed following a disastrous decision by the cartel in 2014 to defend market share. In contrast to the 2014 decision, this time OPEC’s strategy is having the desired effect. Over the past year, despite strong U.S. shale production growth, global inventories have steadily declined. According to the latest Oil Market Report from the International Energy Agency, supply is expected to lag behind demand for the rest of 2018, further depleting inventories: (Click to enlarge) Demand/Supply balance through 2018. In response to declining inventories, global oil prices have steadily increased, breaking through three-year highs last week and again this week. West Texas Intermediate closed last week above $67/bbl, while Brent closed above $72/bbl. These prices are approximately 50% higher […]