U.S. crude oil production may be falling faster than many had thought and we are seeing signs of that in Cushing, Okla. Cushing is the Nymex delivery point and a storage facility that if you listened to the Ultra Bears was supposed to be overflowing with oil. Instead the opposite is happening as supply there have fallen five out of the last seven weeks and is slated to fall once again.
http://admin.futuresmag.com/admin/structure/nodequeueHedge funds are not listening to crazy bearish crude oil price predictions like Goldman's $20 a barrel call and instead are amassing its biggest net long position since last April. Oil fund managers are not betting on $20 a barrel oil this week because they increased their net-long position by 16,855 contracts to 132,857 futures and options in the week ending Sept. 8, according to the CFTC commitment of traders report.
At the time of this writing on Friday, both oil contracts look poised to finish the week lower. Brent is set to close lower for the second straight week, while WTI is about to snap a two-week winning streak. Despite this week’s losses, both contracts remain above their August lows, keeping bullish hopes alive that prices may have bottomed, even if the probability of such scenario appears to have diminished given the lack of further follow-up buying after that late August rally.
Crude futures fell about 3 percent on Friday after Wall Street's most influential voice in oil trading, Goldman Sachs, slashed its price outlook through next year, citing oversupply and concerns over China's economy.
While most people are focused on the current glut of crude oil, soon we will start to focus on production destruction. The International Energy Agency (IEA) was, in the beginning of the year, warning that the globe would be producing so much oil that we would have no place to put.
Crude oil prices fell more than 2% on Friday after Goldman Sachs cut its crude forecasts, citing global oversupply and concerns over the Chinese economy, and after Saudi Arabia dismissed the idea of an oil producer summit.
While crude oil trader's talk about the current oil glut, oil and gas demand continues to surprise to the upside. The latest surprise comes from the latest International Energy Agency reports, which once again says that the agency is being caught by surprise by stronger than expected demand.
The IEA indicated in its report that the long-awaited rebalancing of the global oil market has begun but is likely to last through 2016 as the supply overhang is expected to persist through 2016. Overall it was a supportive report but one that is still projecting supply to outstrip demand through 2016.
World crude oil demand is expanding at its fastest pace in five years thanks to rebounding economic growth and low prices, but global oversupply will last through 2016, the West's energy watchdog said on Wednesday.