Back in December of 2015, I wrote that the spike down to $26 a barrel for oil was a generational bottom and a point that we would look back at and wonder why we did not buy oil when it was that cheap. Of course, at that time it was hard to see that there were calls for $10 a barrel crude and noted analysts that said that oil might not ever trade above $40 a barrel again. That negativity gained some popularity when the U.S. stock market had its worst start in history. In January and February of 2016, we double bottomed at $26 a barrel.

Of course, now looking back at those predictions they look ridiculous now. The long-term commodity cycle really overshadows the doom and gloom of the moment. The thought that somehow the oil glut would always be with us. That this time was different as shale oil producers would continue to produce oil no matter how much money they were losing. Or that cap x cuts that back in 2015 had, at that point, according to Tudor, Pickering & Holt, say 150 oil projects that have been delayed, resulting in an estimated 13 million barrels a day of oil production deferred indefinitely. That was equal to 15% of total global output back in late 2015. That number rose as negativity added to more cuts and loss of future oil production cuts.

I pointed out that oil, back in early 2016, was almost a carbon copy of the double bottom we had in oil back in 1999. I pointed out that in 2015 oil put in its second back to back losing years since 1997 and 1998. The following year of 1999 it gave a historic comeback and cemented a bottom in oil prices for a generation. After falling over 30% in 1997 and 1998, in 1999 the oil market rebounded almost 107%. In 2016 oil also had a big comeback and hit a high of 5524.

Oil struggled a bit in 2017 early on fake news. Doubts about the success of OPEC production cuts and incorrect predictions and overestimations of U.S. shale oil production. The other factor that held back oil were predictions of lackluster demand that has missed the point that sometimes low prices fuel more oil demand, not to mention inspire economic growth.