It appears that Saudi Arabia is saying "enough is enough" when it comes to the correction in crude oil and wants to set the record straight, just one day after an unscheduled Joint Ministerial Monitoring Committee with all the OPEC and Non-OPEC conspirators, Saudi Arabia wanted the market to know that they were not flooding the market with oil.

Just a few years ago the mantra on crude oil prices was “lower for longer.” Irrational pessimism about the dynamic power of the U.S. economy as well as a misunderstanding about the potential and risks associated with shale oil production substantially impacted investment decisions. We had this doom and gloom attitude that the U.S. days were behind us and our manufacturing in the United States was hopelessly lost forever.

And they're off! Crude oil prices are trying to recover after the American Petroleum institute (API) reported a significant 5.79 million-barrel drop in U.S. crude oil supply--the biggest draw since December 2016. This comes after a reported a 4.2 million-barrel drop a week ago.

Saudi Arabia has found its sweet spot for oil and that number is $60 a barrel per Reuters. That is a number the Saudis believe will allow them to prosper and not be high enough to make U.S. shale output a major threat. Saudi Ariba knows that while higher prices for oil will allow some of the more economical shale plays like in the Permian basin to come back on line, it is still too low for some of the other shale plays that may need oil in the 70’s to make sense.

It was just a little over a year a ago when Saudi Arabia declared open warfare on the U.S. energy producer, dumping cheap crude oil on U.S. shores to try to drive the U.S. oil producers out of business. Now the Saudi oil minister, Khalid al-Falih, wants to invest in U.S. oil because he believes that President Donald Trump is good for oil.

Donald Trump advisor Anthony Scaramucci, the founder of SkyBridge Capital, warns of a strong dollar and the dollar drops hot inflation data in the UK has commodities going crazy. Big bullish swings in soybeans, gold and oil and a pop and drop in copper suggests that we could see a big run in many commodity markets but we may have to temper that enthusiasm against perhaps weaker demand from China because of a weaker dollar. It might be time to go commodity crazy because we are going to get some crazy commodity moves.

Crude oil prices had a solid rally on evidence of OPEC production cuts and strong China demand; and while there are predictions for more record-breaking demand in China, the new year is bringing disturbing Chinese export data and more tightening of capital controls. This is raising some concerns about the trajectory of growth in the world’s second largest oil consumer.

OPEC was trying on Monday to rescue a deal to limit oil output as tensions grew among the producer group and non-OPEC member Russia, with top exporter Saudi Arabia saying markets would rebalance even without an agreement.

It was a short week but the takeaway is that every one of the time windows and cycle points were violated. I haven’t seen a situation like that on the daily timeframe in a long time. Even in China, which had the most bearish possible setup of all, we had violation.

Crude oil prices dropped by $2 a barrel on light volume after Saudi Arabia refused to attend a meeting with Non-OPEC members over the weekend. The Saudis, who thought they had a deal with Russia, seem to know that they are failing to do their part. The Russians are probably backing off a bit because they are looking at the consigns that Iraq and Iran is getting and they don’t want to do anymore of the heavy lifting.