Crude oil prices are under pressure again as global growth fears seem to outweigh oil production cutbacks. Weak industrial profits in China and the International Monetary potentially lowering its growth forecast.
Crude oil prices were under pressure after Mario Draghi magic seemed too eased off. Oh, sure, after Mario Draghi said he was disappointed with growth and the lack of inflation, oil got a bounce. Yet, when Asian and European stocks gave up the gains, oil prices falter until a headline came out about those Chinese Military ships that are moving off of the coast of Alaska.
Crude oil prices are proving to be resilient after wiping out a 2% loss to close over 2% higher. Not even a reported 4.7 million increase in crude supply and reports that President Obama has the votes to overcome a veto on his deal to lift sanction on Iran was not enough to keep this market down.
Another 6.2% drop in the Shanghai composite helped drive oil and industrial metals to a six-year low, and only seemed to slow after China pumped 120 billion yuan worth of seven-day reverse repurchase agreements, or reverse repos, which are a short-term loans to commercial lenders in the money market.
Iran is planning to hold an "energy summit" from Dec. 14-16, to unveil new energy contracts and highlight just how quickly they can bring their oil back into the market. Let's hope the U.S. producers can hold a summit.
Advancing technology has made a lot of the unconventional drilling much more efficient and cost effective. As long as WTI prices stay around $60 or higher, we’re going to keep on drilling and literally squeezing more out of a rock.