The white strip for oil seems to have ended. Not a day passes without negative news for oil buyers. Last week ended on a rather minor note - the number of active oil drilling rigs in the US rose again (albeit very slightly, but this was the 11th consecutive week of growth) and reached its highest mark since early 2015. That is, American shale continues to grow. As a result, according to the statistics of the Ministry of Energy, the volume of crude oil production in the US increased by 100,000 barrels a day to a record value of 10.9 million b / d last week.
At the same time in the OPEC +camp, on the contrary, reigns disorder and vacillation. The question of extending OPEC + in the current format for 2019 is no longer worth it. By and large, it has already been resolved - at least the format will change in favor of increasing oil production, and as a maximum the contract signers will quarrel among themselves and the agreement will cease to exist altogether.
So, on the agenda now is the question of how much will increase the production. This question is no longer: do not increase it or not. And this is a very important shift in emphasis. That is, we have shifted from the stage of "negation" towards the "adoption" stage. Yes, Iran, Iraq and Venezuela threaten to block the initiatives of Saudi Arabia and Russia, but this is the battle of David with Goliath, and the biblical miracle in this case is not expected.
So we should expect for the growth if the oil production. And from the side of Russia concrete figures have already been sounded - an increase in production of 1.5 million barrels a day. In fact, this is a waiver from OPEC + (recall, within the framework of the agreement, production was cut by 1.8 million barrels). Given that the growth in oil production in the US and so almost leveled off the efforts of OPEC +, now the bulls for oil will have very tough times.
In connection with such a fundamental background and moods on the market, we continue to recommend mid-term sales of oil.
At the same time in the OPEC +camp, on the contrary, reigns disorder and vacillation. The question of extending OPEC + in the current format for 2019 is no longer worth it. By and large, it has already been resolved - at least the format will change in favor of increasing oil production, and as a maximum the contract signers will quarrel among themselves and the agreement will cease to exist altogether.
So, on the agenda now is the question of how much will increase the production. This question is no longer: do not increase it or not. And this is a very important shift in emphasis. That is, we have shifted from the stage of "negation" towards the "adoption" stage. Yes, Iran, Iraq and Venezuela threaten to block the initiatives of Saudi Arabia and Russia, but this is the battle of David with Goliath, and the biblical miracle in this case is not expected.
So we should expect for the growth if the oil production. And from the side of Russia concrete figures have already been sounded - an increase in production of 1.5 million barrels a day. In fact, this is a waiver from OPEC + (recall, within the framework of the agreement, production was cut by 1.8 million barrels). Given that the growth in oil production in the US and so almost leveled off the efforts of OPEC +, now the bulls for oil will have very tough times.
In connection with such a fundamental background and moods on the market, we continue to recommend mid-term sales of oil.
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