Daily Market Briefing
The weekly oil rig count from Baker Hughes showed a drop of 1 U.S. oil rig last week. The last 4 weeks have shown declining number of active oil rigs.
Over the weekend, Saudi Arabia and Russia both signalled that the current oil production cut agreement between OPEC and non-OPEC will likely remain at least until June.
On Friday, the International Energy Agency (IEA) released some long-term assessments about the evolution of the US oil production and its role in the future. Key points were that the US would be a net oil exporter by 2021 and that the country by 2024 would export a net amount of 4 mbpd. The US production growth has been immense since 2015 and is currently the worlds highest of 12 mbpd. The IEA however expects the US production to increase by 1.5 mbpd during 2019. Even though the IEA estimates such an increase they still expect a supply deficit in Q2 2019 of about 500 kbpd as OPEC likely is continuing their production cut.
The dollar index took a massive beating during last week – the largest weekly decline since August and is down to beginning of March levels. Historically the index is known to be negatively correlated with oil prices so with the index down prices could be subject to upwards pressure.
The Brent crude price is this morning fluctuating between $67.10 and $67.30.