Oil in Global Economy Series: Key oil market updates

Monday, April 23, 2018 7:43 AM UTC

While the oil market continues to focus on supply/demand fundamentals, these are some key updates that you need to keep a tab on,

U.S. oil rig count: The United States is continuing to see a surge in production. According to the latest report, the production rose to a new high of 10.54 million barrels per day. Despite fewer rigs operating compared to 2014/15, the production efficiency has pushed the overall production higher. As of latest report, the numbers of operating rigs rose from 815 to 820, the highest since March 2015. The numbers of operating rigs have increased more than 170 percent since bottoming in May 2016.
Venezuela crisis: Crisis continues in Venezuela. The latest production report from OPEC suggests that the production declined to 1.488 million barrels per day. Reports suggest that payment starved workers are quitting Venezuela’s oil production, which is likely to dwindle further.
Anti-petrodollar: Russia and Iran have launched oil for goods exchange program. Iran has also announced that it would report its currency reserves in Euro ditching dollar. China’s yuan-based oil contract is experiencing significant volume surpassing some of the Brent contracts. Unconfirmed reports also suggest that China is planning to make payment in Yuan instead of the dollar. China has also been reducing its Treasury holdings.
Saudi Arabia: Saudi Arabia’s oil minister said that the country is aiming for $100 per barrel oil price and he added that the world has the capacity to absorb higher oil price.
Trump’s tweet: President Trump slammed OPEC for artificially pushing oil prices higher.