Saudi Arabia’s crude oil exports have also started to decline, to below 7 million bpd in May, for the first time in many months. Russia is preparing to cut 500,000 barrels per day (bpd) off its oil exports in August, and shipping plans so far suggest that Russia could deliver on at least part of its pledge to reduce oil exports next month. Russian crude oil exports have shown signs of decline for a second consecutive week and are estimated to have sunk to a six-month low in the four weeks to July 16. Last week’s count is also 406 fewer rigs than the rig count at the beginning of 2019, prior to the pandemic.Īlso last week, oilfield services giants Halliburton and Baker Hughes both signaled softer demand for drilling on the North American market.Īt the same time, there is already evidence of lower supply from OPEC+. So far this year, Baker Hughes has estimated a loss of more than 100 active drilling rigs. count fell to 669 last week, according to Baker Hughes data on Friday. crude supply growth to slow down pretty significantly to a sequential pace of just 200 barrels per day from here.” oil production growth will also play a part in large deficits in the third quarter this year.Īccording to Goldman’s Struyven, “We expect U.S. The production and export cuts from OPEC+ and the slowdown in U.S. While demand is set for a record high this summer, supply is shrinking. “We expect pretty sizable deficits in the second half with deficits of almost 2 million barrels per day in the third quarter as demand reaches an all-time high,” Daan Struyven, head of oil research at Goldman Sachs, told CNBC’s “Squawk Box Asia” program on Monday. Oil prices are set to rise to $86 per barrel at year-end, from $80 now, as record-high oil demand and lowered supply will lead to a large market deficit. The real #energycrisis is still coming, and at this point it is only right around the corner. The writing has been on the wall for some time now, and we did not heed the wake-up call in 2021. Beyond that, it starts to get very interesting, and the case can even be made all the way to a Fibonacci extension of $160.77 if fundamentals support such a move in the medium to longer term. After that, you should see a fair amount of resistance at the psychologically significant $100 level ($100.72 is my fibonacci target). If the current break above the 200 EMA holds, I think the first real resistance isn't until $93.50. Oh wait, that buffer between us and chaos is as small as it's ever been relative to demand (the SPR currently contains ~17 days worth of US demand). If we get in a bind, we can always tap into the #SPR and equivalent strategic reserves around the world. What happens when interest rates stabilize? What happens when the #usdollar strengthens? What happens when #China resorts to economic #stimulus?īut that's ok. All this with a dismal Chinese economy and suppression of growth in the rest of the world fighting #inflation. In those 3 years, #consumers have not changed their behavior at all, #government has doubled down on its crusade against #fossilfuels, and #oildemand is approaching all-time highs even as rig count declines (currently 15% below 2022 high) and production growth slows. But now that #2024 is right around the corner, how am I feeling? I've had my eye on 2024 as the year we make a more sustainable move higher and I've been vocal about that for 3+ years now. I said #oil's brief foray into $100+ territory in 2021 would be short-lived, it was (to be fair, I said it shouldn't have happened in the first place but #fear proved me at least partly wrong in that instance). What's more, the technical picture is starting to take shape.
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