Crude oil prices are on the rise after Baker Hughes reported the U.S. oil-rig count fell by 7 to 797 rigs. After recent increases that might not seem like a lot, traders now know that to keep U.S. shale production rising you must keep on drilling. Steep shale decline rates means you can’t let up or production will start to ebb and fall.
Crude oil prices dipped as trade war fears went away after a private report that appears to indicate that oil supplies may see a big increase this week. Genscape, the widely followed energy market data and intelligence company, reported that oil supply in Cushing, Okla., was up 2.18 million barrels last week. The increase and the fact that some of the Geo-Political concerns did not actually blow up into a supply disruption over the weekend led to a correction in the price of crude.
WTI crude oil prices are gaining on Brent as strong U.S. demand and Canadian pipeline issues tighten U.S. oil supply even further. This comes as OPEC comments suggest that they are still fully committed to keeping production cuts in place until the end of 2018, along with their non-OPEC coconspirators and even suggesting that the deal could go on longer if need be.
After yesterday’s RBOB gasoline futures expiration blowout, the Trump Administration is pulling out all the stops to try to reduce shortages of gasoline and try to calm down soaring prices. Driven by massive refinery outages and fears of deliverable supply, gas was on high octane. The September RBOB gasoline futures surged at one point higher by more than 28 cents a gallon, driving the wholesale price of gasoline to the highest level in over two years.
The oil drama continues as Repsol and Statoil move to pull oil workers from Venezuela as the country becomes less stable and may be on a path toward civil war. Saudi Arabia’s Saudi Aramco said it is cutting supply to its customers by at least 520,000 barrels per day in September raising expectations that OPEC will get its compliance issues under control and start to rein in Libya and Nigerian production.