US oil exports reached a record last week at five million barrels a day, according to Energy Information Administration data…
Oil market overview
2019-11-11 • Updated
Crude oil edged down in a subdued trading on Monday as investors are still digesting expansion of the US crude oil production.
Benchmark Brent crude futures fell to $55.66 from its last-week high of $56.65. US West Texas intermediate crude futures were down to $52.95 after rising to $53.75 last week.
Baker Hughes officials said on Thursday that drillers added 11 oil rigs in the week of April 13. According to the recent information of the Energy Information Administration, the US crude oil production has grown to 9.4 million barrels per day, making the US the third largest producer after Saudi Arabia and Russia. Cost-cutting technological advancements helped US firms to become more competitive in areas previously reserved solely by such large producers as BP and Exxon Mobil. Field works in Arctic lands and waters make OPEC and non-OPEC signatory parties of the output cut deal more nervous about their market shares in the futures. Despite growing opposition from numerous environmental groups and President Obama’s 2016 ban on drilling in Artic waters, exploration in Alaska managed to reveal massive volumes of oil. The following wave of Artic development might influence the oil prices in the long-term future.
Political tensions in the Middle East (airstrikes in Syria), unplanned outages in Libya resulting in the shutdown of the Sharara oil field contributed to the recent uplift in oil prices. The possibility of extension of output cut deal was an additional tailwind for crude oil futures in the past two weeks.
Next month, OPEC countries and their allies will gather together to decide whether to extend an agreement curbing oil production or not. It will be a difficult decision to make as the signatory parties are facing a lose-lose situation. If they fail to agree on the deal extension, the oil market will be oversupplied and oil prices tumble. If they manage to strike a deal, prices will likely hit higher levels offering the US oil producing industry a scope for further expansion.
So, without the cut deal, the bull market is poised to fade away, with Libya reopening its oil field after outages, geopolitical tension easing and flourishing oil industry in the US.
The past two years have seen the biggest swings in oil prices in 14 years, which have baffled markets, investors, and traders due to geopolitical tensions and the shift towards clean energy.
The oil prices rally and world central banks’ dovish monetary policy caused by the Covid-19 pandemic were the main reasons for current inflation growth…
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.