“Missing barrels” has always been a challenge regarding the IEA analysis. This article provides an intriguing explanation.

“Prior to the uptick of oil prices in 2008 there had been persistent rumors of “missing barrels” that haunted the price downturns in ’98 and in the early 2000’s, the logic expressed here closely mirrors those reports,” Jeff Johnson, CEO of EPUS Global Energy

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Fears of a global oil glut have returned to sink oil prices in March, but two fund managers argue that supplies are much tighter than traders realize. They expect oil prices to roughly double, to $100 a barrel, within a year.

Prices for oil trade around $50 a barrel and recently set lows for the year, but that doesn’t worry Leigh Goehring and Adam Rozencwajg, managing partners at Goehring & Rozencwajg Associates.

“We’re actually more bullish than we were before,” said Goehring, in an interview with MarketWatch.

“The underlying fundamentals of what we‘ve outlined for everyone…are happening right in front of us and yet people are becoming more and more bearish, so you’re setting yourself up for a very, very big, positive surprise,” he said.

Goehring and Rozencwajg, who launched a natural resources fund in January GRHIX, -0.21%GRHAX, -0.32% made their call for $100 oil in 2018 late last year when the Organization of the Petroleum Exporting Countries reached an agreement with other major producers, including Russia, to cut production.

The November announcement of the OPEC-led deal, which officially kicked in at the start of 2017, helped fuel strong gains in the last two months of 2016. West Texas Intermediate crude CLK7, -0.58%  gained 45% last year, while Brent crude LCOK7, -0.18%  jumped by more than 50%.

The OPEC pact draws parallels to a production cut announced in 2006, Goehring and Rozencwajg said. “They didn’t need to cut back then” and they don’t need to cut this year, said Goehring.

WTI crude spiked to more than $145 a barrel in July 2008.  by Myra P. Saefong, Market Watch  Read More…