Oil market Pressure remains Inevitable, but prices Went UP a bit this morning

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A short revision & Today’s prices

Followed by last week’s huge losses, Oil prices recovered today. Inspired by OPEC’s ideas to extend a supply cuts in next 6 months, it made a market prices rise.

While the relentless rise in U.S. oil outputs is making a fuss on supply’s side.

“U.S. West Texas Intermediate (WTI) crude oil futures CLc1 added 26 cents, or 0.5 percent, by 0401 GMT (12:01 a.m. ET), but were still below the $50 mark pierced on Friday at $49.88 a barrel.
Brent crude futures LCOc1 rose 30 cents, or 0.6 percent, to $52.26 per barrel. “ (Reuters)

Last week’s oil prices seemingly fell, backed up by ornery high crude supplies coming from the U.S. Despite OPEC’s possible production cuts extensions by 1.8 million bpd in next 6 months, the end of last week represented markets impossibility to handle artificially caused production surplus from U.S.

There are also some non-OPEC countries who accept the decision about cutting the production in following 2H17.

U.S. drillers

U.S. drillers are constantly adding some new oil rigs. It is now 14th week in a row, and the production has extended to 688 rigs. Extending also the 11- month recovery that will boost U.S. shale production in May.

It will be the largest monthly supply increase in more than last 2 years. It will have a huge impact on OPEC’s decision.

“Since its trough on May 27, 2016, producers have added 372 oil rigs (+118 percent) in the U.S.,” Goldman Sach said

U.S. crude production is at 9.25 million barrels per day (bpd) C-OUT-T-EIA, up almost 10 percent since mid-2016 and approaching that of OPEC’s top exporter Saudi Arabia.

– “WTI oil slipped back below the $50 per barrel level, amid concerns that the lack of inventory draw down since the OPEC production cuts is a sign that the cuts are not enough to rebalance supply and demand and put a floor under prices,” said William O’Loughlin, investment analyst at Rivkin Securities in a note on Monday. (Reuters)

WTI and both the Brent Crude Oil benchmarks are now down for more than 7.5 % since the end of the last year. Rather it makes a serious difference compared to 2016 period.

OPEC is planning to extend the output cuts. But there comes a very tricky question itself. If a Panel really decides to cut the outputs, will anything change?

 

 

Persistence in Goals as a key to success ?

U.S. drillers and U.S. policy Is persistent, although they are aware that market imbalance comes straight out their extra engaged oil rigs. Oil market is suffering.
Steel market is suffering too. Is U.S. market really that liberal? And ready to accept some natural changes, and prices coming from other sources even if lower than theirs (China’s steel for example). Competitive prices which have all the rights in this world to stay and fight the markets without being questioned as dumping prices?

Not every economy in this world has the power to affect trade and prices when they feel to. Speaking about Oil, OPEC’s agreements are destroyed and will again be if they do not find a solution for bordering their Oil from U.S. Oil. Which Will not easily happen.

OPEC’s possible extensions and an expected fall in Iranian production lent markets some support on Monday, traders said.

“Iran’s crude oil exports are set to hit a 14-month low in May, suggesting the country is struggling to raise exports after clearing out stocks stored on tankers.
Iranian oil exports, especially to its core markets in Asia, had soared since the ending of most sanctions against it in January 2016. (R.)”

This will again be an Agitated week on world’s OIL MARKET.

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