The oil market seems to be sensing something as the market is taking off this week even with bearish Energy Information (EIA) inventory data the price is headed to the upside. The oil market prices are hitting the highest level since April and the spreads are suggesting that supplies are starting to tighten significantly and charts that suggest that if we close August above 8280, that could send prices into the 90’s.The market is sensing something that wasn’t clear in the EIA data and that may be because the EIA data has been less than clear. Massive adjustments and implied demand numbers that swing from week to week and big swings in the other oils category, may suggest that oil supply is tighter than we might think, and demand may be stronger. Also, the market is going to look at the possibility that US oil production may be peaking.We will look at the Baker Hughs rig count as well as data from the EIA. Baker Hughes (BKR.O) last week said that the number of oil and natural gas rigs operating is the lowest since January 2022. Baker Hughes said the total rig count is 97 rigs, or 14%, below this time last year.Giovanni Staunovo points out that the EIA will publish data for the month of April. March US crude production was at 13.182mbpd in March, EIA’s forecast is for 13.150 mbpd, US oil demand was at 20.037mbpd in April 2023, EIA’s forecast for April 2024 is 19.573mbpd. This comes as data for oil in products this week was at or below normal levels, and its possible based on demand rising and geo-political risk the market is now becoming concerned. U.S. commercial crude oil inventories are 2% below the five-year average for this time of year. Total motor gasoline inventories are the same as the five-year average, distillate fuel inventories are about 9% below the five-year average for this time of year.This comes as the US has imported crude at the highest level in 4 years possibly to replace US production that may struggle to keep up with demand. And while the prices could fail if we see some reduction in demand or if the market gets freaked out by today’s inflation data or fed statements, the reality is you need to be hedged because if the charts complete the formations that they seem to be setting up, there could be a big upward price spike coming. Better to be safe than sorry.Both oil and natural gas will be watching weather developments as well. Fox Weather is reporting that a new tropical disturbance is now being monitored for development in the eastern Atlantic Ocean just in the wake of Invest 95L, which is on the cusp of becoming a tropical depression or Tropical Storm Beryl. The new disturbance is just a few hundred miles south-southwest of the Cabo Verde Islands and is as of now just producing disorganized showers and thunderstorms.  However, some slow development of this system is possible early next week while it moves generally westward across the central and western tropical Atlantic at 15 to 20 mph, according to the National Hurricane Center (NHC). It currently has a 20% chance of development within the next week. You had better download the Fox Weather ap to watch this.More By This Author:As Long As Its Starts With The Letter C. – Manic Metals Report The Energy Report: Taking The Wind Out Of The SailsLong live the King. Manic Metals