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Trader Michael Urkonis. left, works with specialists John McNierney, center, and Douglas Johnson on the New York Stock Exchange, Friday, November 9, 2018. Stocks fall as energy companies are dragged down by continued falling crude oil prices . (AP Photo / Richard Drew)ASSOCIATED PRESS
Oil prices fell again last week, down 6% from the previous Friday. Brent and WTI crude levels both fell in the last six weeks or so, which is interesting when the price of natural gas began to rise.
Futures on Brent and WTI are down about 25% since the beginning of October, the market tipping towards contango.
Since May, according to the IEA, the United States (+ 1 million b / d), Saudi Arabia (+ 0.62 million b / d) and Russia (+ 0.45 million b / d ) jumped to a record high.
In October, world oil production increased by 2.6 million barrels per day to 100.7 million barrels per day in October, with OPEC accounting for only 15% of this growth.
In addition, although it has asked the Saudis to increase their production to compensate for the loss of oil production due to US sanctions returning to Iran on November 5, the Trump government has granted exemptions to eight countries to allow more imports from Iran.
Higher inventories were also bearish. For the third quarter, equities in OECD countries rose by 58.1 million barrels, the largest increase since 2015. A gain in September means that OECD equities are probably above the average of the last five years.
On Thanksgiving, Americans have something to be grateful for: gas prices have fallen with crude oil.
Oil prices have fallen rapidly.Data Source: CME; JTC
Yet despite falling prices, oil producers are still well positioned to make money. We must therefore expect a stronger production.
The low price environment since 2014 has forced companies to become more efficient and reduce their costs. This means that they can usually still be in the dark today even when oil costs only $ 50 per barrel. Thus, with the WTI calling for $ 65 next year, the EIA expects US crude oil production to reach a new record of more than 12 million barrels a day next year, compared with 9, 4 million barrels per day starting in 2018.
Although its Russian partner opposes calls to join further cuts, OPEC could cut its supply by 1.4 million b / d to resist an oversupply.
On the demand side, just be aware that any slowdown in economic growth that dampens demand would simply be offset by lower prices. The IEA has maintained its forecast that global demand would increase by 1.3 million barrels per day this year and 1.4 million barrels per day by 2019, in line with the goal of l & # 39; EIA.
Although the IEA and EIA have stated that the global supply of oil would exceed demand in 2019, higher prices could be forthcoming. Bullish support comes when the United States sanctions Iranian oil at the time of the expiry of current Iranian oil exemptions in the United States, as well as the decline in Venezuelan production and uncertainty over oil prices. Libya.
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Trader Michael Urkonis. left, works with specialists John McNierney, center, and Douglas Johnson on the New York Stock Exchange, Friday, November 9, 2018. Stocks fall as energy companies are dragged down by continued falling crude oil prices . (AP Photo / Richard Drew)ASSOCIATED PRESS
Oil prices fell again last week, down 6% from the previous Friday. Brent and WTI crude levels both fell in the last six weeks or so, which is interesting when the price of natural gas began to rise.
Futures on Brent and WTI are down about 25% since the beginning of October, the market tipping towards contango.
Since May, according to the IEA, the United States (+ 1 million b / d), Saudi Arabia (+ 0.62 million b / d) and Russia (+ 0.45 million b / d ) jumped to a record high.
In October, world oil production increased by 2.6 million barrels per day to 100.7 million barrels per day in October, with OPEC accounting for only 15% of this growth.
In addition, although it has asked the Saudis to increase their production to compensate for the loss of oil production due to US sanctions returning to Iran on November 5, the Trump government has granted exemptions to eight countries to allow more imports from Iran.
Higher inventories were also bearish. For the third quarter, equities in OECD countries rose by 58.1 million barrels, the largest increase since 2015. A gain in September means that OECD equities are probably above the average of the last five years.
On Thanksgiving, Americans have something to be grateful for: gas prices have fallen with crude oil.
Oil prices have fallen rapidly.Data Source: CME; JTC
Yet despite falling prices, oil producers are still well positioned to make money. We must therefore expect a stronger production.
The low price environment since 2014 has forced companies to become more efficient and reduce their costs. This means that they can usually still be in the dark today even when oil costs only $ 50 per barrel. Thus, with the WTI calling for $ 65 next year, the EIA expects US crude oil production to reach a new record of more than 12 million barrels a day next year, compared with 9, 4 million barrels per day starting in 2018.
Although its Russian partner opposes calls to join further cuts, OPEC could cut its supply by 1.4 million b / d to resist an oversupply.
On the demand side, just be aware that any slowdown in economic growth that dampens demand would simply be offset by lower prices. The IEA has maintained its forecast that global demand would increase by 1.3 million barrels per day this year and 1.4 million barrels per day by 2019, in line with the goal of l & # 39; EIA.
Although the IEA and EIA have stated that the global supply of oil would exceed demand in 2019, higher prices could be forthcoming. Bullish support comes when the United States sanctions Iranian oil at the time of the expiry of current Iranian oil exemptions in the United States, as well as the decline in Venezuelan production and uncertainty over oil prices. Libya.
