Monday, July 16, 2018
Today’s Market News
Crude Production: The bearish sentiment is back in the energy market this morning after comments on Friday from Russian Energy Minister Alexander Novak that Russia and other producer may increase their crude output by 1.0 million barrels per day or more should a supply shortage hit the market. Along with that news traders are closely watching what may come from a meeting between U.S. President Trump and Russia’s President Putin at Helsinki, Finland.
Libya: Libyan crude production continues to be a wild card in recent days. The Libyan National Oil Corp. said last week that they had reopened oil export terminals in the east with production expected to increase in the coming weeks after dropping to 527,000 bpd following force majeures. On the other hand production at the El Sharara field dropped by 160,000 bpd over the weekend due to precautionary closing of several oil wells after an unknown group kidnapped two oil workers.
U.S. Petroleum Reserves: Helping to put some bearish pressure on energy prices are headlines from Friday that the Trump Administration is considering a release of 5 to 30 million barrels from the U.S. Strategic Petroleum Reserve to help subdue recent high gasoline prices. President Trump has been very vocal that OPEC and non-OPEC producers need to increase their production to curb higher oil prices.
Market Opinion: The whipsaw trade for energy futures continues with the complex seeing a nice pullback in early trade after closing out last week with some gains on Friday. With plenty of news on both sides of the aisle it really depends on which one or two traders focus on in any given day. Overall the global oil supply picture remains tight and with areas like Libya having a hard time getting back on track as well as word that Canada’s Syncrude processing plant could lose a third of its production in August there seems to be enough bullish news to keep markets from sliding much further.