Organization of Petroleum-Exporting Countries

Authored by Nick Cunningham via OilPrice.com,

If OPEC fails to agree to extend their production cuts for another six months, Iraq could be a major reason why.

For many years after the 2003 U.S. invasion, Iraq was exempt from OPEC’s production quotas in order to help the country rebuild. But in recent years, Iraq has succeed in ramping up its output, overtaking Iran to become OPEC’s second largest oil producer. Today, production stands at 4.4-4.5 million barrels per day (mb/d).

Well that did not last long...

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The bounce off a $47 handle on Friday in WTI was fading fast again this morning...

following news that money managers cut their bullish Brent and WTI oil bets by 154,871 to a net-long position of 699,209 contracts - the biggest decline on record.

While the drop was large, net longs remain extreme suggesting the long squeeze has more to go...

Which of course OPEC had to try and jawbone away...

During a week that saw WTI crude prices erase all post-OPEC-production-cut-deal gains, after the Saudis admitted 'cheating' (but rapidly back-pedalled), oil speculators added almost 80,000 contracts to their short positions - the 2nd most in 34 years.

This surge in shorts reduced the massive record net long crude positioning by the 2nd most in history - but clearly it remains extremely one-sided still...

For the 9th straight week (and 35th of the last 37 weeks), the US oil rig count rose this week (surging by 14 to 631 - highest since September 2015).

The rig count continues to track the lagged WTI price

US Crude production has accelerated at a faster pace than the lagged rig count...

And that is pushing OPEC to the breaking point:

Authored by Tsvetana Paraskova via OilPrice.com,

The U.S. shale cowboys are back on their horses and leading a strong recovery in the oil patch that is not expected to falter even as WTI prices dropped last week below $50 per barrel for the first time in more than two months.