U.S. benchmark West Texas Intermediate closed up 4.21% to $48.25 a barrel today, July 25. International benchmark Brent climbed 3.93% to $50.51 a barrel. Big moves. Exactly what you’d expect on a day when both OPEC and U.S. shale producers produced big news.
Today, July 6, the market has been of two minds (at least.) West Texas Intermediate climbed in the morning to $46.47 a barrel on news that the American Petroleum Institute was forecasting higher demand and a bigger than expected draw down in U.S. inventories. But the afternoon session saw West Texas Intermediate drop back to $45.30 on news that U.S. production had climbed again.
A month ago when OPEC extended its production cuts to to the end of 2017, Saudi Arabia promised to do “whatever it takes” to stabilize oil prices? Now it’s not at all clear what the Saudi’s can do.The dual problem is rising production from countries outside the OPEC agreement and rising U.S. production.
Today’s moves take oil to a 7-month low. And oil is now in an official bear market for 2017 with West Texas Intermediate down 20% from its February 23, 2017 high at $54.45 a barrel. Why the tumble?
It still has to be ratified by the end of May meeting of all OPEC members, but it looks like Saudi Arabia and Russia have agree to extend current production cuts past their June expiration. U.S. benchmark West Texas Intermediate moved up 2.01% to $48.80 a barrel. The positive surprise in this news, as far as oil markets are concerned, is that the two want to extend the agreement not for another six months but through the first quarter of 2018.
So much for Monday’s oil rally. This morning, a day after Russia and Saudi Arabia succeeded in talking up oil prices with promises that OPEC and allied non-OPEC producers would extend the current production cuts past their June expiration until the end of 2017, U.S. benchmark West Texas Intermediate is down 0.8% to $46.06 a barrel and international benchmark Brent crude is off 0.81% to $48.94 a barrel as of noon in New York
Oil prices have bounced back today from yesterday’s tumble with West Texas Intermediate climbing 1.63% and the Brent international benchmark advancing 1.49% as of 11:45 a.m. New York time. The gain still leaves West Texas Intermediate below $50 a barrel at $48.50. The ostensible reason for today’s climb is a surprise drop in U.S. crude inventories of 237,000 barrels last week,
Saudi Arabia has told OPEC that it will not play sucker to countries that won’t meet OPEC’s targets for production cuts. Russia, Iraq, and the United Arab Emirates have not yet delivered the production cuts they agreed to. Saudi Arabia has said that it raised production back above 10 million barrels a day in February.
