Oil rig count in US falls again

Oil prices are beginning the new week of trading slightly down after having come under significant pressure on Friday and falling by as much as 2%. Brent is trading below $50 per barrel again, while WTI is priced at less than $46 per barrel. The focus is shifting back to the still high oversupply. 

"This week, the US Energy Information Administration (EIA) and the International Energy Agency (IEA) is also likely to lower its forecast for the period up to the end of 2016", says Commerzbank. 

This is because the EIA's current estimate of the June figure, the starting point for its previous forecast, is 250,000 barrels per day lower than before. A more marked decline in US oil supply is likely to prove that OPEC has been right to follow its strategy of defending market shares and using low prices to crowd alternative suppliers out of the market. 

This is also consistent with the first fall in the oil rig count in the US in seven weeks, which has reversed the increase seen in the preceding five weeks. Of course long term inflation expectations are also low in the euro zone. But not as low as in Switzerland! However, no amount of complaining is going to change anything here.