It seems the move by Saudi Arabia’s Crown Prince Mohammed bin Salman to arrest members of the royal family and their business associates in a corruption crackdown is proving to be wildly popular among the Saudis young population.
The House rolled out its tax reform bill and not only did it put in a big tax cut for all corporations it also gave oil producers an edge by removing incentives for electric vehicles and solar companies.
The bullish fundamentals on oil are becoming more apparent as both Saudi Arabia and Russian are signaling that they are committed to reducing the global oil supply glut and that they are signaling an extension of the current production cut agreement to the end of the year.
Tropical Storm Harvey has the potential to be the first Hurricane to hit the Texas coast since 2008 and could be on a path to hit directly into the heart of the U.S. “Refinery Row” which equates to about one-third of capacity and running about 7 million barrels a day. One track of the storm has it hitting a cluster of about five refineries.
Why do you build us up with oil cuts baby, just to let us down and mess us around? And then worst of all, you don’t extend production cuts when you say you will, but supply will fall still. Shale needs you to keep on drilling, we have known that from the start. So cut back more and get non-OPEC to take part?
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.