Posted by on March 24, 2017 4:03 pm
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Categories: Business Cartels Chronology of world oil market events Commodity markets Crude Economy Kuwait OPEC Organization of Petroleum-Exporting Countries Petroleum Petroleum industry Petroleum politics Price of oil

With crude production at 13-month highs, the trend of rising rig counts (now up 10 weeks in a row) suggests OPEC remains anything but in control as the global inventory glut deepens. The last week saw the oil rig count rise by 21 (the most since January) to 652 – the highest since September 2015.

From 318 at its trough in May 2016, the US oil rig count is now up 332 to 652 (a double) – tracking the lagged WTI price perfectly…

Bloomberg Intelligence analysts Andrew Cosgrove and William Foiles wrote in a note Monday.

“U.S. rig counts may continue to rise further in the short run, given the lag between approvals and physical deployments,” Cosgrove and Foiles said.

“Any rig increases should remain front-loaded in the first half as capital spending ramps up at least 40 to 50 percent in 2017.”

US Crude production continues to track the lagged rig count and is now at its highest since Feb 2016…

The reaction in WTI was modestly lower…

And OPEC producers are in trouble…

As Bloomberg reports, oil officials from Kuwait, Algeria, Venezuela, Russia and Oman meet in Kuwait this weekend to discuss how well OPEC members have adhered to the agreement to curtail output. With oil falling on the heels of bearish figures from the EIA, the organizations’ producers are being squeezed by fiscal breakevens that soar an average of $40 a barrel above the current oil price, according to figures from RBC.

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