US Crude Oil Production May Not Be Growing Quite So Fast

What Falling Gas Prices Mean for the Hotel Industry

Crude oil futures continued to surge Monday, posting an eight consecutive daily advance, the longest such streak in months. With WTI Crude Oil, the 52-week trading range is $42.05 on the low end and $58.30 on the high end. The production cut led to a temporary rally in crude prices up to US$55 in January with hopes that it would rebalance supply and demand. One is U.S. supply side response to low oil prices.

Oil prices rose to a two-week high yesterday, extending a rally into a sixth straight session after a decline in weekly USA production eased concerns about deepening oversupply. The OPEC members did not announce any specific deals or anything fundamental in terms of supply to support the oil prices and this was a disappointment for the oil bulls who were expecting some decent help from the OPEC as higher oil prices are likely to help their economy as well.

LAGOS-Crude oil prices have risen to $48.77 per barrel, showing $3.23 in excess of Nigeria's 2017 budget reference of $44.50 per barrel. Brent fell 19 percent in the first half of 1998 and would need to close at $46.01 a barrel or lower on Friday to do worse this time.

Crude began the first week of July marginally higher than Friday's close, as a drop in USA oil rig count last week - the first since January - lent support to expectations that the country's tight oil production growth might be starting to stall due to lower prices.

USA crude production fell for the first time this year in April, reining in exuberance over rapidly growing domestic output.

"But this still leaves the question of how did we (and the market) get it so wrong?" analysts from the bank said in a research note Thursday.

The move higher is a sharp turnaround from last month, when USA crude prices hit a 10-month low and Brent fell to its lowest level since November. Per the most recent report, USA output decreased 100,000 barrels per day - the largest fall since July 2016.

The acceleration in Canadian production in spite of low global oil prices reflect the economics of the oil sands of Alberta, the heart of the Canadian petroleum industry. "We may be seeing these market forces act more quickly upon USA production". For the week, WTI posted was up $3 (7.59 percent).

Elsewhere, the bank says Saudi Arabia's economic reforms are "credible, robust, and generally there is a strong government commitment", although there are risks of slippage because of persistent depressed oil prices.

Other sources confirm the decline as well: preliminary data by Reuters estimate that oil loadings from Russian Baltic Sea ports will decline by 13% to 2,1 million tonnes in the first 12 days of July.

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