After falling for the first time this year two weeks ago, Baker Hughes reports US oil rig count rose once again (up 2 to 765) for the 24th week in the last 25, to the highest since April 2015.
“The so-called re-balancing is likely to happen later than earlier,” Michael Poulsen, an analyst at Global Risk Management Ltd, said on Friday.
It does appear we have reached an inflection point in the rig count numbers (if the historical relationship with crude holds)…
While EIA cut its 2018 production outlook, this week saw the effect of field maintenance in Alaska and Tropical Storm Cindy in the Gulf of Mexico fall away and production surged once again this week – to new cycle highs…
And the lagged rig count trend suggests crude production has further to rise yet…
Crude prices have been active today with macro headlines hurting and machines helping ramp any dip… the rig count create instant selling which was instantly bid back up…
And while US crude production just jumped to cycle highs (and shale production we believe reached a record high), OilPrice.com’s Nick Cunningham notes the oil market rebalancing hasn’t even started yet…
Global oil production surged in June “as producers opened the taps,” according to a new report from the International Energy Agency (IEA). OPEC was a major culprit, with Libya and Nigeria doing their best to scuttle the production cuts made by other members.
But it wasn’t just those two countries, who are exempted from the agreed upon reductions. OPEC’s de facto leader, Saudi Arabia, also boosted output by an estimated 120,000 bpd in June, from a month earlier. That put Saudi production above 10 million barrels per day (mb/d) for the first time in 2017. Those gains, combined with the 80,000 bpd increase from Libya and a 60,000 bpd jump from Nigeria, plus some smaller contributions from Equatorial Guinea, put OPEC’s June production 340,000 bpd higher than in May. It also took the cartel’s compliance rate down to just 78 percent from 95 percent in May, the worst monthly figure for the group since its deal came into force at the start of the year.
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