• 30 mins Enbridge Pipeline Expansion Finally Approved
  • 2 hours Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 2 hours OPEC Oil Deal Compliance Falls To 86%
  • 18 hours U.S. Oil Production To Increase in November As Rig Count Falls
  • 20 hours Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 22 hours Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 24 hours EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 1 day Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 1 day Aramco Says No Plans To Shelve IPO
  • 4 days Trump Passes Iran Nuclear Deal Back to Congress
  • 4 days Texas Shutters More Coal-Fired Plants
  • 4 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 4 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 4 days Chevron Quits Australian Deepwater Oil Exploration
  • 4 days Europe Braces For End Of Iran Nuclear Deal
  • 5 days Renewable Energy Startup Powering Native American Protest Camp
  • 5 days Husky Energy Set To Restart Pipeline
  • 5 days Russia, Morocco Sign String Of Energy And Military Deals
  • 5 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 5 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 5 days India Needs Help To Boost Oil Production
  • 5 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 5 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 5 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 5 days District Judge Rules Dakota Access Can Continue Operating
  • 6 days Surprise Oil Inventory Build Shocks Markets
  • 6 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 6 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 6 days Chinese Teapots Create $5B JV To Compete With State Firms
  • 6 days Oil M&A Deals Set To Rise
  • 6 days South Sudan Tightens Oil Industry Security
  • 7 days Over 1 Million Bpd Remain Offline In Gulf Of Mexico
  • 7 days Turkmenistan To Spend $93-Billion On Oil And Gas Sector
  • 7 days Indian Hydrocarbon Projects Get $300 Billion Boost Over 10 Years
  • 7 days Record U.S. Crude Exports Squeeze North Sea Oil
  • 7 days Iraq Aims To Reopen Kirkuk-Turkey Oil Pipeline Bypassing Kurdistan
  • 7 days Supply Crunch To Lead To Oil Price Spike By 2020s, Expert Says
  • 7 days Saudi Arabia Ups November Oil Exports To 7-Million Bpd
  • 7 days Niger Delta State Looks To Break Free From Oil
  • 8 days Brazilian Conglomerate To Expand Into Renewables
Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Wave Of Profit-Taking Keeps Oil From Breaking Out

Offshore Platform Mexico

Forty-one years to the day after the birth of chef Jamie Oliver, and the recent rally in oil is looking a wee bit overcooked, after having a nibble at the $50 mark. Dollar strength returns to pressure prices lower, while a bout of profit-taking after hitting the psychological level of $50 is spurring on selling into the holiday weekend. Hark, here are five things to consider in oil markets today.

1) According to Saudi Aramco’s annual review, the Kingdom produced 10.2 million barrels per day last year, up from 9.5 million bpd in 2014 – reaching an all-time high. Oil reserves were unchanged at a hefty 261.1 billion barrels.

Our ClipperData affirms Saudi Aramco’s numbers that exports rose above 7 million barrels per day last year. Meanwhile, for the Arab Gulf on the whole, increased loadings over the last year from Saudi, Iraq, and Iran mean that loadings have been higher on a year-over-year basis for every one of the last twelve months. The last six months have been particularly strong, averaging nearly 12 percent higher than year-ago levels:

2) On the economic data front, we have seen weak inflation numbers from Japan, in deflationary terrain for a second consecutive month at -0.3 percent for April. This has stoked ‘bad is good’ sentiment in Japan, as it appears to have prompted the delay of an increase in sales tax by Prime Minister Abe. Out of Europe we have had positive French consumer confidence data, strong Spanish retail sales, but weak confidence numbers out of Italy. Related: The Consequences Of $50 Oil

On to the U.S., and we have seen Q1 GDP refreshed; it is slightly below than the initial expectation, at +0.8 percent QoQ. Consumer spending was also mildly disappointing, coming in at +1.9 percent for Q1, compared to consensus of +2.1 percent.

3) In contrast to the growing drumbeat ahead of next month’s Federal Reserve’s FOMC meeting, there is more of a sense of apathy ahead of OPEC’s meeting next Thursday in Vienna. The meeting is summed up on the OPEC website, with the event titled the 169th (Ordinary) OPEC meeting. It should pass in an ordinary – and orderly – fashion, with the usual wee bit of excitement and anticipation as the gang gathers, but with a feeling of deflation when it ends. The biggest difference with this meeting is going to be the absence of the charismatic Ali al Naimi….he will be sorely missed (*looks misty-eyed*).

4) The graphic below is from this piece which suggests that oil may need to rise to the mid-$50s before producers really ramp up tapping their drilled but uncompleted wells (DUCs). Below $50/bbl, these wells are likely to be tapped at ‘a more measured pace’. EOG resources is leading the list of DUCs – but for those that are DUCs and deemed as abnormal inventory:

(Click to enlarge)

5) Following on from the above point, those DUCs that are included in normal working inventory are showing up in this data from Rystad Energy. They project there are still about 3,900 DUCs across U.S. shale plays. Permian has the highest DUC inventory with 1,200, followed by Eagle Ford with 1,000, then Bakken at 850. Related: 5 Crazy Energy Ideas

(Click to enlarge)

By Matt Smith

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Dan on May 27 2016 said:
    With this price of oil 49.2 CHK should cost $7 share, not $4!!!

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News