The U.S. Rig Count went up 11 on Friday, bringing us to a total of 508 rigs. More bearish news came last week as Houston-based company (Apache) revealed a new discovery in the Permian Basin (Texas). The newly acquired land is being called “Alpine High.” It is expected to contain upwards of three billion barrels of oil and 75 trillion cubic feet or rich natural gas.
According to Baker Hughes, U.S. crude stockpiles are at the highest seasonal level in at least three decades. If this is true, how will this newly discovered oil affect domestic/global oil supply? If we take a look at U.S. production in the month of August, you will see that the output was 33.24 million. If OPEC continues output at current levels, it is predicted that output will be 757,000 bpd higher than needed. Coupling this with Kazakhstan’s increasing production, some might say that the near future looks somewhat bearish.
As of 11:57 AM: Heating oil is up $0.0150, while RBOB is up $0.0350.
In the news:
- Colonial Pipeline- shut down gasoline line due to leak
- Saudi Arabia/Iran- increasing oil production
- Weak Dollar today = oil/commodity prices are up