Oil Market Quotations Stable Supported by OPEC Agreement


Crude oil bears may have seen their shadows signaling at least six more months of a bull oil market.

The implications of this transformation go far beyond global oil markets and are reshaping the global economic order. "It comes with West Texas Intermediate crude selling for about $64 a barrel, a price that could spur even more drilling".

Similarly, exports to European countries accounted for 22% of total USA exports of crude oil in the first eight months of 2017, averaging 193,000 b/d.

Output from Venezuela, once the largest producer in Latin America, has been on a chronic decline because of mismanagement and lack of funds.

After a two-year oil bust that hit bottom in 2016, USA production has increased as prices slowly recovered and oil companies adopted better technologies and techniques make profits at lower prices. The bank also said rising United States shale supply will be needed to keep the market steady in the near-term, since any ramp-up in OPEC production will lag the rebalancing.

Goldman Sachs Group Inc. hiked its short-term crude oil price forecast by as much as 33 percent, saying the market is now likely balanced. Earlier this month, U.S. President Donald Trump waived the application of nuclear sanctions, but warned that this could be the last such waiver. It had crossed that figure twice - in October and November of 1970, but after that it had embarked on terminal decline until shale oil came along over the past decade to revive its oil fortunes. This news overshadowed a government report earlier in the week which showed US production at a 50 week high. WTI prices were about $60/bbl last month. These programs require oil prices to remain higher, to which end OPEC will need to continue pumping less as the US pumps more.

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The bank now estimates Brent will reach United States dollars 75 a barrel over the next three months and will climb to USD 82.50 within six months, analysts including Damien Courvalin wrote in an emailed report. OPEC countries have suffered the most as their light blends are being displaced by US shale.

Earnings season is upon us and global oil companies are reaping the rewards of efficiencies and cost-cutting and a stronger oil price.

American crude oil [production] is a game-changer in worldwide trade, global politics and domestic energy security. Higher prices are an incentive for American drillers to pump more. Previously, U.S. could only import to Canada.

"We need to dig a little deeper, whether it's inventory level by region or by type of crude and make sure that [we] do not supply the market with the wrong type of crude prematurely", Falih told reporters.

This is the chart that Saudi Arabia and Russian Federation - and even Canada - should fear the most, as the U.S.is emerging as a vital "swing exporter".

Traders are watching the spread, or difference, between Brent and WTI closely as the discount on the USA benchmark makes it more competitive in some markets, incentivizing exports.