Brent Crude crashed through $70 a barrel and WTI just shy of $65, shattering another glass ceiling many oil bears said was impossible to ever see. This came as OPEC said it has no intentions to relent on production cuts and overshadowed rising rig counts. Even as the market gets a little turn around Tuesday profit taking, the oil bears are having to throw in the towel.

 As I told Barons “WTI oil prices will average around US$67 in 2018 before settling trading over US$70. If Opec keeps its crude production-cut deal till the end of this year, WTI prices could hit US$80 a barrel,” said Flynn. And that looks like that is going to happen.

There are no such things as natural ceilings when it comes to the price of crude oil. Oil bears told us that shale oil production would keep oil low forever and that oil was turning into a worthless commodity. They told us that shale oil and producers would have to find a way to live with $26 a barrel oil. They told us that oil prices would be lower for longer and that prices would stay below $30, than $40 than $50. They said that U.S. shale put a ceiling on crude. As I told Reuters: But Flynn said a fast climb in U.S. output is not so clear. “The realities of the shale market are starting to sink in. Shale producers must add a lot of rigs, frack crews and add a lot of investment. It takes time to raise that production.”

The bears were wrong about shale and its ability to cap prices. They were wrong about OPEC adhering to production cuts. They made the same mistake that they made back in the late nineties. The best bull markets are born in a glut of supply.

The Energy Report has written many times over the last few years that oil is at a bottom end of a major bull cycle. We called a major bottom back in 2000 and we did so again in 2015. As I wrote back when oil was at the bottom in November of 2015. ” While crude oil prices in the short term are fixated on the Fed and current oversupply, in the big picture it may be time to party like its 1999. In 1999 oil prices had just come off a year (1998) where oil prices had dipped as low as $10.35 per barrel and there was doom and gloom across the energy space. Yet in hindsight oil in 1999 was at a historic turning point and a major bottom that changed the energy landscape for over a decade.