In this article, we would revisit and re-analyze the factors that have been very influential this year in driving crude oil prices. After a bottom in February around $27 per barrel, both the crude oil benchmarks rose sharply above $50 per barrel in June but since then the price has struggled to break above the $50 area decisively and has been hovering there since.

• Inventory and drawdowns: Last week oil price rose sharply after data revealed (both API and EIA) that inventory suffered the biggest drawdown of the 21st century. EIA reported 14.5 million barrels and API reported above 12 million barrels. But the biggest draw coincided with a big drop in imports and offshore rigs shutdowns due to hurricane Hermine. While big drawdowns are definitely cheering, one should not over cheer as we are sitting on 3.1 billion barrels of inventory.

• Lower oil price should have led a bigger drop in crude production in the United States as the Shale oil was considered to be the costliest one to bring above ground but annual report of Pioneer shows that extraction cost ranges from $2.25 to 412.5 per barrel.

• Pessimists projected that Iran would not be able to revitalize its oil production fast enough yet the country is just few hundred thousand barrels away from reaching its pre-sanction production level.

• Another key factor that has been influencing the oil market is the possibility of a production freeze deal. After a failed attempt to do that in April, hopes are up once more. But think for a moment, Saudi Arabia and Russia cooperating to freeze production while Iran and Nigeria are permitted to increase. Doesn’t sound likely. Even if that happens, the current level of production is much higher than that was in April.

Both the oil benchmarks are down this week. WTI is currently trading at $45 per barrel and Brent at $47.2 per barrel.