Brent crude touches $80 a barrel with forecast for it to move higher on shrinking inventories

Positive news on future oil prices–especially for U.S. domestic shale producers

U.S. oil production rose to 9.782 million barrels a day last week from 9.754 million barrels per day in the prior week, according to the U.S. Energy Information Administration. Production had dropped in the prior week–the first week to week decline in two months. U.S. production has now climbed in 10 of the last 11 weeks. Better yet, rising production came along with declines in crude inventories.

No news on extending or deepening cuts out of OPEC meeting today

No news on extending or deepening cuts out of OPEC meeting today

The meeting of OPEC and its allies in Vienna today, September 22, ended without an extension of  production cuts (scheduled to expire in March 2018) and without an agreement to make those cuts in output deeper. The after-meeting talk was full of declarations of progress toward reducing the glut in global oil inventories. And there was nary a sign of worry that higher oil prices could bring an increased supply from U.S. oil shale producers back into the market

OPEC’s agreement to cut oil production is much stronger than Wall Street expected and oil prices soar

Yesterday I wrote that the financial markets’ reaction to whatever came out of OPEC’s meeting today would depend on how weak or strong the agreement to cut production was. Well, the actual agreement announced today to cut oil production was far stronger than expected. That surprise sent oil markets soaring today with U.S. benchmark West Texas Intermediate up 8.34% to $49.00 a barrel. The Brent benchmark rose 8.82% to $50.47 a barrel.