Noting that US crude inventories are at their lowest level since August 2015, PVM Oil Associates analyst Tamas Varga says "OPEC is edging ever closer to its desired target of reducing OECD industrial stocks to the five-year average".
Several factors drive Moody's now bearish view on oil. Estimates suggest that the Opec production was largely flat at 32.41 mbpd in December, but the compliance to cuts improved to 128 per cent, which will support oil prices. Output shrank the most since October.
In fact, OPEC forecasts published in November showed that they expected the war between them and the United States shale industry to further hot up over the next 12 months - and beyond.
On the whole, the WTI prices gained almost 12 per cent previous year as the Opec production cuts started to rebalance markets by slowing supply.
The past six months have seen revival of confidence in the industry with oil futures curve shifting from "contango" to "backwardation" i.e. where near-term prices are higher versus those for later delivery - hence making it unprofitable to store crude.
Oil has climbed to a three-year high above $69 in London amid OPEC production cuts, growing demand and political risks to supply.
"As forecast, distillate stocks are running down as U.S. power plants are using fuel oil where they can, with demand increased as a big nuclear plant on the east coast went down". An oversupplied market pushed oil prices below $30 per barrel in early 2016. While that could happen, unexpected supply disruptions have a knack for ruining forecasts.
The cartel had at its November 30, 2017 meeting agreed to extend oil output cuts until the end of 2018 as part of the global efforts to eliminate excess oil supply in the worldwide market.
The protests in Iran that began in late December have posed no immediate threat to oil production but there is concern that US President Mr Donald Trump may reimpose sanctions on Iranian oil, which could disrupt oil exports. "OPEC is edging ever closer to its desired target of reducing OECD industrial stocks to the five-year average".
Firstly, US shale oil companies continue to go from strength to strength.
Some bullish voices, like Goldman Sachs, see the oil market balanced at the end of Q2 2018. Furthermore, the company has a huge cash hoard, which it's now using to repurchase $2.5 billion in stock.
Looking ahead, the coming year looks very interesting for crude oil, as it could throw up a lot of surprises.
However, it's not alone. Marathon Oil (NYSE: MRO), Encana (NYSE: ECA), and ConocoPhillips (NYSE: COP), likewise, can all grow just fine at $50 oil.
Canadian natural gas prices, which fluctuated considerably in 2017, recovered somewhat in the final quarter of the year as transportation systems resumed operating at full capacity after several maintenance projects during the year.
Europe remained the major destination of Nigerian crude grades, accounting for 36.59 per cent of the total sales, with Asia and the Far East receiving 28.43 per cent, according to Group General Manager, Crude Oil Marketing Division, Malam Mele Kyari on Tuesday. Meanwhile, they can produce an even greater gusher of excess cash flow if they're wrong.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen.
Investors can gain by buying and holding earlier-dated contracts, profiting as they "roll" the position from one month to the next, Currie said.