Is The Rally In Oil Sustainable?

I have been getting a tremendous number of emails as of late asking if the latest rally in oil prices, and related energy stocks, is sustainable or is it another ‘trap’ as has been witnessed previously.
With geopolitical turmoil mounting, for North Korea to Iran, and as natural disasters have rocked the refinery capital of the world (Houston,) the question is not surprising.
As regular readers know, we exited oil and gas stocks back in mid-2014 and have remained out of the sector for technical and fundamental reasons for the duration. While there have been some opportunistic trading setups, the technical backdrop has remained decidedly bearish.
Today, I am going to review the fundamental supply/demand backdrop, as well as the technical price setup, as things have improved enough to warrant some attention. As a portfolio manager, I am interested in setups that potentially have long-term tailwinds to support the investment thesis. The goal today is to determine if such an environment exists or if the latest bounce is simply just that.

This post was published at Zero Hedge on Sep 26, 2017.