Submitted by Nick Cunningham via OilPrice.com,
Oil prices have traded reliably in the $50s per barrel since OPEC agreed to cut production last November, but having failed to break through a ceiling in the upper-$50s, crude prices are in danger of falling back again.
EIA confirmation of OPEC cut-compliance is trumping the dismal inventory data and surging US production for now. However, as US oil rig counts continue to rise (+8 to 591 - highest since Oct 2015) with US crude production charging ahead with it, the question many should be asking (given all-time record high net long speculative positioning in WTI/Brent) is "what will OPEC do if the market doesn't rebalance?"
Submitted by Tsvetana Paraskova via OilPrice.com,
It’s been a month now that investors and analysts have been closely watching two main drivers for oil prices: how OPEC is doing with the supply-cut deal, and how U.S. shale is responding to fifty-plus-dollar oil with rebounding drilling activity. Those two main factors are largely neutralizing each other, and are putting a floor and a cap to a price range of between $50 and $60.
While much has been said about the impact on the dollar from the proposed Border Tax Adjustment, which may or may not be implemented depending on what Trump says/tweets on any given day (and as a reminder, there has already been a loud outcry against it by powerful lobby groups, including the Kochs, as a result of the expected decimation of US retailers should BTA be implemented) little has been said about how it could impact US commodity production in general, and oil in particular.
While OPEC members were infighting over crude production and export quotas, posturing with temporary production cuts (just so the Saudis could get a six month reprieve during which it clears out a massive internal crude glut), Russia was busy capturing market share, and according to overnight Chinese data, Russia overtook Saudi Arabia as China’s top oil supplier last year for the first time ever boosted by robust demand from independent Chinese "teapot" refineries.