Crude closed last Friday at $48.52, up $4.03, or 9.06%, on the week. ULSD saw a weekly gain of 11 cents and RBOB a staggering 14.2 cents. All of the market noise surrounding the OPEC meeting that will take place in late September was clearly the driving force behind last week’s market upsurge. However, futures prices are trading lower this morning and refined products seem to be giving back some of last week’s gains as the bulls seem to be running out of steam. WTI is down 1.44 to $47.08, RBOB is down $0.0241 to $1.4888, and ULSD is down $0.0263 to $1.4933.
WTI crude had gained nearly 20% since early August, and was up a record 16% in the last seven trading session, according to Bloomberg.com. However, the market has retreated ever-so-slightly as bearish information once again floods an already “flooded” crude market. Over the past few months we have scantily mentioned the hostility that has taken place in the Niger Delta. The Niger Delta Avengers (NDA) have been attacking oil and gas infrastructure since January in the aims of creating a sovereign state in the Niger Delta. Well, according to the official NDA website, they have declared to put down their weapons and hereby cease attacks in order to negotiate with the federal government of Nigeria. This will give Nigeria a much needed opportunity to increase their crude production, but it will however add to the global crude supply-gut. On top of that, Iraq, OPEC’s second largest producer, will be increasing crude exports by roughly 5% following an agreement with the KRG, Kurdistan Regional Government, regarding three oil fields in the Kirkuk region.
Other supply information in the mix: Iranian production is getting close to pre-sanction levels at 3.85 million barrels per day. Saudi Arabia’s new oil minister has hit the ground running and has its production approaching a record high of 10.8 mbpd. Additionally, Baker Hughes data showed an increase of 10 U.S. oil rigs last week to a total of 491, the 8th consecutive weekly gain.