Oil products are weak as demand fears are weighing down the market, awaiting a time when supply is at historically high levels. Gas demand is at a six-year low as bad weather in California has given a hit to demand and warm temperatures elsewhere in the country is reducing heating oil demand. This comes as refining margins for big oil companies are reducing the positive impact from OPEC inspired oil price increases.
Swiss-based commodities giant Glencore has extended a deal with Libya's state oil firm to be the sole marketer of one third of the country's current crude oil production, sources familiar with the matter said.
Even as the U.S. oil rig count rose by 17 to 583 rigs this week and is the highest since October 2015, the big money knows it will take time for U.S. producers to erase the cuts that OPEC and non-OPEC players like Russia have already made. Rigs in the Permian basin are hot but in other formations we may have to see a higher price for oil to reignite the investment appetite.
The Trump Administration is acting swiftly and it is widely believed the U.S. will be announcing new sanctions on Iran because of a ballistic missile launch that was in violation of the agreement made by the Obama administration.
Crude oil prices are showing signs of breaking out to the upside as U.S. oil production falls for the second month in a row despite the following: expectations for an increase, OPEC record compliance to oil production cuts and because of a harder line on Iran by the Trump Administration.
Attention is on the Job data that is due on Friday morning. Following the FOMC announcement yesterday indicating no change in interest rates and inflection on the inflation target not being met, analysts are looking for color from the hourly wages as potential indicators of inflationary pressures.