U.S. shale producers are drilling at the highest rate in 18 months but have left a record number of wells unfinished in the largest oilfield in the country – a sign that output may not rise as swiftly as drilling activity would indicate.
Crude oil prices sold off after the Trump Admintation did not close the deal on the American Healthcare Act and delayed the vote until today. Oil today is bouncing back on growing expectations that OPEC will lay the groundwork for an extension of production cuts this Sunday at its technical meeting in Kuwait.
Crude oil prices recovered after another shocking increase in oil inventory after traders started to focus on the fact that refiners are beginning the long road out of seasonal maintenance. The 5.0-million-barrel crude supply increase was driven by a huge 902,000-barrel increase in crude imports mainly from Canada of all places and a slight 20,000 barrel a day in U.S. oil production. U.S. oil production hit 9.129 million barrels per day, slightly above one year ago but still down from the 9.422 million barrels a day we were pumping two years ago.
Normally, when crude oil makes a decisive move it is usually because of oil inventories or a headline out of the Middle East. Yesterday oil moved because of healthcare uncertainty. Speaker of the House Paul Ryan may get a bit of a complex because as soon as his press conference began about the American Healthcare Act the stock market became unglued and sold off, dragging the oil market down with it.
Crude oil prices sold off yesterday as the Libyan government says they will re-open closed oil ports after fighting stopped Libyan crude exports for the last two weeks. Yet, one cannot count on the promise of Libyan oil as they have yet to prove they can be a reliable supplier. Still, oil is on the rise again as a weakening dollar and the promise that OPEC might extend production cuts and the fact that refiners will soon rise again out of maintenance is giving the bulls some new life.
Oil fell around 1% on Monday as investors continued to unwind bets on higher prices after record cuts last week because of concerns that growing U.S. oil output could hamper an OPEC-led production cut deal.