Crude Dreams

It seems like the price of crude oil is finally taking notice of the new records in inventories being set every week.

OPEC is ruminating about further cuts. The problem, for OPEC anyway, is that keeping the price high has fed a resurgence in US production as the rig count keeps driving higher and higher. A resurgence that will not easily be countered as the high prices have allowed producers to sell forward the oil that they have yet to produce either into the public futures market, or by private contract. Either way, they can drill with confidence in the pricing.

As a result, the global re-balancing of the oil markets that OPEC hoped to achieve remains a fantasy. GLWT.

As a side note, speculators’ most recently reported positions in WTI crude oil futures total about 525 million bbl., or nearly $27 billion at the current price of $51.

Post a comment or leave a trackback: Trackback URL.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: