Oil prices drop to three-months lows

The nation’s crude output has climbed to 9.09 million barrels a day, according to data from the Energy Information Administration.

US equities and stock exchange traded funds dipped Tuesday as crude oil prices declined for the sixth consecutive day.

“We just need the USA inventory piles that we have to come down, and again, that requires a wider WTI-Brent spread”, Blanch said. Primary sources, however, indicate that Saudi has increased production back above 10 million bpd.

Crude prices were falling again Tuesday, with West Texas Intermediate for April delivery trading down almost 2% at $47.45. Industry sources reported Libyan production declined 111,000 barrels per day as conflict reignites in the so-called oil crescent.

Saudi Arabia led the way in January with more production cuts than anyone else, and the others are starting to catch up, which enables Saudi Arabia to increase some of its own production again.

Initially, the agreement met with considerable success.

OPEC countries made a decision to curb its production by 1.8 million barrels in the first half of 2017.

“But look what’s happening: the Saudis are sacrificing by cutting production, and oil prices are still going down. seen in this light, it would make flawless sense if the Saudis started to question the wisdom of continuing with production cuts”.

Production outside OPEC is now expected to rise by 400,000 bpd, 160,000 more than previously thought. The February report indicated that it is pumping about 91,000 bpd above the intended quota, though this is still a reduction from its pre-November production level of 4.6 million bpd.

Saudi Arabia has ended up with precisely what it wanted to avoid.

There are also the Russians to consider.

The Energy Information Administration (EIA) expects US monthly average regular gasoline retail prices to increase from $2.30 per gallon in February 2017 to $2.51 per gallon in July before falling to $2.24 per gallon by December.

The double whammy of yesterday’s EIA drilling productivity report – showing rampantly rising shale production next month – combined with a bearish OPEC monthly oil market report, has sent oil prices scampering lower, testing key support levels on both Brent and WTI.

This previous strategy was meant to damage higher-cost non-Opec producers including U.S. shale oil.

The resurgence of USA shale oil production is also giving investors a headache. That aligns with plans by top oil exporter Saudi Arabia under OPEC’s production cut agreement, he said.