CNBC is running out of credible, bullish analysts on the oil complex. The calls for $65+ WTI seem relatively sparse. Is anybody in their right mind still thinking crude oil is going higher? Of course. We all know Keynes’ saying, “The market can stay irrational longer than you can stay solvent.” But seriously, how much longer can the bulls continue this irrational move on what appears to be a bearish fundamental backdrop?

The Baker Hughes Rig Count is one of the few remaining bull arguments. As of Friday, June 5, the US oil rig count dropped for the 26th consecutive week or six months. US rig counts are at the lowest level since 2010.

After reaching a peak of 1,536 rigs, the count has dropped 58% to 642. The current higher move has also been fueled since Friday’s OPEC decision when a shakeout started of overzealous bears who thought they could outsmart OPEC and everyone else. This move higher has all the makings of a short squeeze of weak bears. With that being said, all indications are that the market is making a run at $65 or at least the May 6 high of $63.62.

The recent rising price of crude oil will likely lure shale producers into turning the spigots back on sooner rather than later. Eventually, there will be an increase again in rig counts. At this point, the realization that the USD is at multi-year highs, US crude oil inventories are at an all-time high, Iranian oil will soon likely be back in the world market, OPEC is maintaining production at 30 million bpd, and tankers are hoarding oil in the GOM will kick in. So essentially, the first Friday at 1 EST, when the Baker Hughes Rig is released, and we see our first increase in rigs in months, I will be short this market.

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