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.
In the U.S. overall petroleum inventories continue to fall as the petroleum oversupply drain game has begun. Not only did we see the API report an 840,000 barrel drop in crude oil inventory, but also a 1.8 million barrel drop in distillate inventory offsetting a surprise 1,347-million-barrel increase in gasoline inventory caused another drop in overall U.S. liquid supply.
The big March snowstorm that is going to bury the northeast, as well as cold and snow in the midwest, is already having an effect on a lot of different markets in a lot of different ways. We saw oil and products struggle as grounded airlines and snowbound travelers will reduce the demand for jet fuel and gasoline. We also saw electricity and power prices soar and a rally for natural gas as we get the demand we failed to get in February now in March.
Deputy Crown Prince Mohammed bin Salman, in charge of Saudi Arabia's reforms, left on Monday for Washington to meet President Donald Trump on a visit expected to promote the world's top oil exporter as an investment destination.
Crude oil futures are still reeling from last week’s massive crude oil build and another jump in U.S. rig counts. It was a double-eight as oil rigs increased by eight and the eighth week in a row that the rig count has risen.