Crude oil is struggling even after the Energy Information Administration (EIA) reported the sixth drawdown in crude oil in a row and the fact that U.S. oil production dipped for the first time in 13 weeks. The bears argue that while we have seen declines they will have to be much larger to drain off excess supply.
When will the global oil market get in balance? It already has and according to the International Energy Agency, that process is accelerating. The global oil market has achieved so-called market balance but much work remains to reduce excess global oil supply.
Crude oil prices are soaring after Saudi Ariba and Russia said they have agreed to extend oil production cuts beyond the agreed upon deadline for another nine months. That means both Russia and Saudi Arabia will extend cuts to March of 2018 at a time when we are seeing evidence that the prior cuts are just starting to have an impact. It appears that the oil cuts had a lag time to get the market in balance as U.S. shale producers increased output but also as traders dumped oil from floating storage and releases of oil from the U.S. Strategic Petroleum Reserve.
Oil prices slipped on Monday, wiping out some of the previous session's gains, as lower growth targets in China and concerns over Russia's compliance with a global deal to cut oil output sparked renewed worries over a crude oil supply glut.
Oil prices fell on Thursday after U.S. crude stocks hit an all-time high and official data showed Russian oil production unchanged in February, with no further cuts to tighten the market and drain global oversupply.
Iraq's Kurdistan has agreed on new deals to borrow $3 billion from trading houses and Russian state oil firm Rosneft that will be guaranteed by future oil sales to strengthen its fiscal position as the semi-autonomous region fights Islamic State.
The crude oil market is wondering why the Strategic Petroleum Reserve numbers remained unchanged even as the Department of Energy announced that it had already sold over 6.0 million barrels of oil to a private concern, and they announced another sale of 10 million more barrels of oil by the end of this month. We know there is mandatory reporting of inventory shifts by the oil companies but is the SPR on the same reporting schedule.