US oil production has turned a corner after a long period of weak petroleum prices, the government said, with volumes rising for the first time since early 2015.
The Energy Information Administration forecast that oil output from the US will increase 1.3 per cent to 9m barrels per day in 2017, abandoning an earlier prediction of a 0.9 per cent fall.
In the first forecast for 2018 in its monthly Short-Term Energy Outlook, the statistical agency said US crude production will rise another 3.3 per cent, or 300,000 b/d, to 9.3m b/d. Production hit bottom last September, EIA said.
“The general decline in US crude oil production that began almost two years ago is likely over, as higher average oil prices and improvements in drilling efficiency are giving a boost to output,” said Adam Sieminski, the EIA’s administrator.
Crude oil trades near closing levels from yesterday
The WSJ is reporting that the Saudi’s have cut oil output to fully implement the OPEC pledge.
Crude oil futures are trading a $53.29 near the closing level from yesterday.
Crude oil remains between $50 and $55 per barrel. The 50, 100 and 200 hour MA are between $53.03 and $53.51. We trade between those MA levels. Traders may just take clues from the next move. IN favor of the bulls is the floor developed at the $52.12 level in trading on Tuesday and Wednesday. That was the same low area from December 22 (see blue circles). We still need that push above the MA though.
Global oil and natural gas prices are expected to remain volatile again in 2017, but fluctuate within the $40-60 per barrel range, Moody’s Investors Service said in a press release on Tuesday.
“The rating agency’s oil and natural gas price estimates — within a medium-term oil price band of $40-$60/bbl for both Brent and West Texas Intermediate (WTI) crude globally and in North America — remain unchanged for 2017-19 from its November 2016 update,” the release stated. “Moody’s expects prices to remain volatile within this band.” In North America, the incoming Trump administration is expected to prioritize domestic oil and coal production, benefiting energy infrastructure projects in the short-term. Russia’s agreement to cut oil production is unlikely to hurt its oil companies, but Latin American companies will continue to face funding risk for several years due to tight market conditions, according to Moody’s. The oilfield services and drilling sector will likely be constrained globally by weak demand, overcapacity and high debt levels, the release also said.