Oil was crashing on the street, after a Presidential tweet, and the sanctions on Iranian oil now will be gone. And the man who spurred it on sit, in judgement of all wrong, he decides and the Saudis sing a song that they’ve been wronged.

I will tip my hat to the green substitutions. Take a bow to the shale revolution. Smile and grin at the supply all around. Pick up the phone and say, cut back supply today. Then I'll get on my knees and pray.  We don't get fooled again!

The Saudi’s are still simmering after being hoodwinked, bamboozled and snookered and fooled by  President Donald Trump. It appears they feel they have been taken by the art of the deal maker and they want to get oil production cut revenge. While the Saudi’s want to send a message to President Trump with a massive oil production cut, the Russian’s are urging caution and perhaps a cooler head. Besides, after indictments in Saudi Arabia on the alleged killers in the  brutal murder of Jamal Ahmad Khashoggi ,there will be a few more people in Saudi Arabia probably losing their head anyway. Russian President Vladimir Putin said that  “We need to be very accurate here, each word matters, but the fact that the cooperation (with OPEC) is needed is obvious and we will cooperate.”

Yet, it is not just the Saudis that feel fooled by the President’s pledge that he would get Iranian oil exports down to zero, but some big hedge funds, that got caught in one of the most epic sell-offs in oil history, are not too happy with the President’s Iranian oil sanctions sleight of hand.

Reuters news reports that” Saudi Arabia did not receive an advance warning when Trump made a U-turn by offering generous waivers that are keeping more Iranian crude in the market instead of driving exports from Riyadh’s arch-rival down to zero, OPEC and industry sources say. Angered by the U.S. move that has raised worries about oversupply, Saudi Arabia is now considering cutting output with OPEC and its allies by about 1.4 million barrels per day (bpd) or 1.5 percent of global supply,” sources told Reuters this week. “The Saudis are very angry at Trump. They don’t trust him anymore and feel very strongly about a cut. They had no heads-up about the waivers,” said one senior source briefed on Saudi energy policies.

Of course, does President Trump care if the Saudi’s trust him or not? We know he does not care if the hedge funds feel duped. The Saudis are mad and angry and have already cut supply of oil to the US. Sources say that the Saudis will hold back on their heavy oil that U.S. refiners are clamoring for despite a massive build in U.S. oil supply last week. The feeling is that if the oil market can rally in the face of 10.3 million barrel crude oil build, the bottom in oil probably,  but the larger question is whether it is the right kind oil.

The U.S. is awash in shale, but it is leading to too much gasoline and not enough distillate. The Saudi and Venezuelan oils are favored by U.S. refiners as it yields more distillate in a distillate hungry globe. The IEA reported another disturbing 3.6 million barrels drop in distillate fuel inventories leaving them a whopping 8% below average. The cut back in Saudi crude oil to the U.S. and the falling output from Venezuela is going to make it more challenging  for refiners to get caught up on supply.

Besides, the crude oil build was enhanced by 1.4-million-barrel release from the U.S. Strategic Petroleum Reserve that has unleashed over 8 million barrels of  storage in the last month and a half. The demand numbers for both diesel and gasoline were higher and even though we have a lot of gasoline supply prices rallied after the EIA reported a larger than expected 1.4-million-barrel drop in supply.

Natural gas came crashing back after a bearish injection in what could become one of the most volatile markets this winter. Its record production versus record demand and the lowest storage in recent memory. The EIA reported that working natural gas in underground storage in the Lower 48 states as of October 31, 2018, totaled 3,208 billion cubic feet (Bcf), according to interpolated data from EIA’s Weekly Natural Gas Storage Report released on November 8. Inventory levels for the Lower 48 states and in each of the U.S. natural gas regions ended the refill season at their lowest levels since October 2005, and these levels were considerably lower than their previous five-year averages. This comes as John Kemp of Reuters reports that U.S. heating demand has climbed far above the seasonal average this week and has been much higher than in any of the last three years.