Crude oil prices continue to feel the heat from a rise in U.S. rig counts and seasonal weakness, but is finding some support near the yearly lows. Oil sank after Baker Hughes said the U.S. oil rig increased by 6 to 670.
Crude oil is trading on very important historical support as the market tries to find support at $44 a barrel. For oil to go much below these price levels and stay there we would have be in a new paradigm, because according to research by Dave Boyce at Dixie-Industrial, it is a level that oil has been in only 3% of the time in the last 10 years.
Some analysts see this as a win win because lower prices are good for consumers and the price dip may put downward pressure on inflation readings, which means the Fed can maintain stimulative low rates longer.
OPEC is all in and will continue to flood the globe with oil in an effort to bury the U.S. shale crude oil producer. OPEC will continue to produce over 30 million barrels a day adding to the globes 2 million barrel a day of overproduction.
OPEC is feeling the pain of lower prices and Saudi Arabia has already reduced production yet it seems that with demand faltering and the dollar rising prices look to continue lower. ... the fear is that if the cartel does cut it may only succeed in losing market share.
The Energy Information Administration weekly supply support seems to suggest that low gas prices are spurring demand! Drivers are saying fill it up again as they felt richer as gas prices fall near $3 a gallon