New Week, Same Story

By: Daniel Guttman / February 20, 2017

The market is closed today in observance of President’s Day. With that said, there will be no pricing for Argus, OPIS, or Platts, the market for electronic trading will be closing early today, and prices quoted last Friday are in effect until Tuesday @ 6:00 p.m. ET.

New week, same story. The market for WTI crude is continuing to balance its upside potential from OPEC and non-OPEC cuts with the downside potential stemming from the increase in U.S., and several other nations’, supply due to the promising price of over $50/bbl crude. Stuck in the $52 - $55 range for several weeks now, it seems as if each percentage increase in production cut compliance is countered with an additional rig here in the U.S.

The most current compliance rate after the first of a six month deal is 93% for OPEC members and 48% for non-OPEC members. The map below from Bloomberg.com shows the 21 countries involved in this deal and how they stand through January:

 

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As you can see, only four countries have reached their production cut target. Of those four, three are OPEC members: Saudi Arabia, Angola, and Qatar, with Oman being the non-OPEC nation. For the goal to be achieved (balancing global supply with demand) the non-compliant nations will need to catch up, deeper cuts may need to be implemented, or even an extension of the deal might have to happen. Although, any of these bullish moves would inevitably increase the price/bbl of crude oil and continue to make it even more appealing for nations like the U.S. to continue extensive growth and production of oil. Which comes first: $60/bbl crude or another supply glut?

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Categories: Daily Market Update


Daniel Guttman

Written by

Daniel Guttman

With a background in wholesale and commercial sales as well as pipeline scheduling, Daniel is currently the Manager, Business Development in the Card Access Fuels department. He is tasked to find new and innovative solutions to increase sales opportunities for the sales team while managing and evaluating internal department processes. He assists with day to day personnel management, customer data analysis, as well as the daily Pacific Pride inventory and pricing direction.


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


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