Oil shorts are shocked as oil prices keep rallying. Massive capital spending cuts in the energy space as well as a refinery strike is giving oil and oil products the boost. While many continue to say that the fundamentals don’t justify the rally, the truth is these are the same folks that were shocked when oil went so low in the first place. The perception of what is a fair price for oil changes quickly as a futures market looks ahead from what is to what will probably be. Oil products led the way Monday as the first major refinery strike since the 1980’s caused market concerns. The Strike by United Steel Workers union (USW) impacted about 10 percent of U.S. refining capacity. Even as many argued that output so far at the refineries has not been impacted, wholesalers and jobbers bid up spot prices just in case. Genscape, the respected company that monitors energy industry and refining activity, reported yesterday that two days in, the strike by the United Steel Workers union (USW) at seven U.S. refineries and two other petrochemical and co-generation facilities has had little effect on operations. Genscape admitted that the strike pushed refined products prices higher today from concerns that production may be impacted. Genscape, which monitors approximately 58% of the refining capacity where strikes are taking place, said so far, no operational changes have been observed. Even so, oil products continue to rally as many are not certain if the refineries over the long run can maintain output. Some refineries are going to shut down for maintenance early as the strike is giving them the excuse they need. The other concern is that the strike may spread to other refineries and other industries as well. The strike is entering its third day with no end in sight. We called a bottom at $44 on oil, and it looks like it will hold up. With the technical looking strong and wounded shorts we still have the capacity to surprise on the upside. While the front end of the curve seems well supplied, the demand to buy oil to put into storage has offered some support. With storage filling rapidly that could weigh on prices later, but for now you can’t get in the way. The International Energy Agency last week warned that supply would tighten later this year and we could see a 350,000 barrel drop in Non-OPEC supply. That is a number that could grow if the Rig and Capital spending cuts keep coming, not to mention more shale bankruptcy possibilities. In Checkout Price Links https://www.youtube.com/watch?v=EI1wUhBgaZ4&list=PLDq9JQANqxRxCBaHqunzBT4Frxitjw-XV&index=2 MarketWatch Says that I am a must follow in 2015 on Twitter! You can follow me on Twitter @energyphilflynn and you can also join me on Facebook. If you have any questions or if you want to get my trade levels for today call me at (888-264-5665) or Email Pflynn@pricegroup.com. If you want to start trading apply by hitting this link https://newaccount.admis.com/?office=269.