Organization of Petroleum-Exporting Countries

High yield energy credit markets are in trouble again, with risk now at its highest level in 7 months.

Despite this morning's Iran-hyped OPEC bullshit and a small draw in Gasoline, it appears the reality of surging US shale production and lagging demand is weighing down oil (and gasoline) markets...

Since OPEC announced its production cut extension, the crude curve has crashed at the front-end...

Macquarie's head ofoil & gas research warns...

Following API's reported build in gasoline (and distillates), oil prices have chopped around amid Saudi headlines and OPEC jawboning, as all eyes are focused on gasoline inventories in the DOE report. An unexpedted draw in Gasoline (and Crude draw) sent prices higher initially, but another surge in production capped some of the gains and prices fell back.

API

Authored by Cyril Widdershoven via OilPrice.com,

The fledgling production cut strategy of OPEC (Saudi Arabia) and non-OPEC (Russia and the FSU) shows that a new strategy is needed to counter the ongoing doubts in the markets.

Today's Baker Hughes report confirmed that the US shale miracle continues, as another 6 oil rigs were added bringing the total to 747, the highest since mid-2015, with domestic producers seemingly oblivious - or perfectly well hedged - to the ongoing decline in crude prices which is once again set to crippled the Saudi budget.

And as has been the case for the past year, virtually all of the increase in rigs came from the Pemian basin...

... and if Goldman is right, this is just the beginning of a shale cypercycle that will triple shale production over the next decade.

For the 22nd week in a row, the number of US oil rigs rose (up 6 to 747) to the highest since April 2015.

Given the historical relationship between lagged prices and rig counts, we suspect the resurgence in rigs may begin to stall...

Oil is headed for the longest run of weekly losses since August 2015 as OPEC member Libya restored production and the surplus in the U.S. shows little sign of abating.