Crude oil for March delivery surged up $1.84 to $31.58 a barrel after ending last week up $0.20 or 0.7 percent at $29.64 a barrel. The more actively traded April futures jumped $1.64 to $33.39 a barrel.

The price of crude oil has seen considerable volatility over the past few weeks amid speculation about the outlook for global production. A few OPEC countries and Russia promised to curtail production then shortly thereafter refuse to trim production when competitor oil producers promise to keep the floodgates open.

But early today, an omen for higher crude oil prices came by way of acknowledged trouble in the new US shale oil industry. Just when the US was justifiably proud of being close to energy independence we learn that the energy price war has just about collapsed our new oil industry.

Today’s report from the International Energy Agency elicited a bullish response from investors. The IEA reported that U.S. shale production was expected to decline by 600,000 barrels per day (bpd) in 2016 while falling an additional 200,000 bpd in 2017. As a result, the oil market could begin to rebalance in 2017.

This is good for oil prices but bad for energy independence and good paying jobs in the new US oil production business. But stock traders and commodity traders ran with IEA’s mid-term outlook and bid WTI crude, sending the commodity higher by 5.1% to $33.38/bbl.

The continued strengthening of oil prices puts the energy commodity near an unexpected bullish breakout point – advancing and possibly trending above its 50-day moving average:

This chart is of the futures market and as you can see, prices for crude oil futures ended today just under the 50MA. But if we look at the Oil Index for the NYSE ARCA you will note that today’s jump in prices put it over the 50MA. We can also see this bullish breakout in several ETFs and spot market oil prices.

The increase for crude oil prices contributed to significant strength among energy stocks as well, which saw further upside after moving notably higher last week. The NYSE Arca Natural Gas Index spiked by 4.7 percent, while the Philadelphia Oil Service Index and the NYSE Arca Oil & Gas Index shot up by 3.5 percent and 3 percent, respectively.