It was an active night for global markets, including a terror attack in Iran, the takeover of Banco Popular in Spain--not to mention the American Petroleum Institute Report that showed a big drop in crude supply but big increases in gasoline and distillates.
Even as the U.S. oil rig count rose by 17 to 583 rigs this week and is the highest since October 2015, the big money knows it will take time for U.S. producers to erase the cuts that OPEC and non-OPEC players like Russia have already made. Rigs in the Permian basin are hot but in other formations we may have to see a higher price for oil to reignite the investment appetite.
Crude oil prices are trying to figure out the potential risk to the market because of the fallout from President Donald Trump’s travel ban and another rise in the U.S. oil rig count. This comes as the trade puts on it biggest net long oil position in history as OPEC production cuts are exceeding market expectations.
It may be the year of the Fire Rooster on the Chinese calendar, but for China and the rest of the Asian block, it is going to be the year or decade of crude oil. Oil prices hit a three-week high as the market focused on rising oil demand expectations and dwindling global oil inventories. While U.S. oil demand slipped a bit for seasonal reasons, a report that India's oil demand will soar gave the bulls some more reasons to be bullish.
Oil prices fell 1.5 percent to steady at around $53 a barrel on Friday after the biggest weekly rally since 2009 following OPEC's decision this week to cut crude output in order to rein in a global glut.
Russia plans to use its post-Soviet era record high November oil production as its baseline when it cuts output under this week's deal with OPEC, Deputy Energy Minister Kirill Molodtsov said on Friday.
WTI Crude staged a savage rebound during trading on Wednesday with prices clipping $49 following the shocking OPEC production cut deal which eased some concerns over the excessive oversupply in the markets.