OIL PRICES UP
The expected decrease in shale oil production this summer is causing oil prices to rise. According to the Drilling Productivity report released June 8 by the Energy Information Administration, the government is calling for a 91,000 less barrels per day of shale oil in July. Oil prices seemingly rebounded after the data was released. This news comes on the heels of a decline in oil prices on June 8 due to the Chinese oil crisis concerning oversupply and less demand.
Production efficiency is helping shale oil flow remain steady although there are fewer rigs drilling for oil than in the past. The expected decrease in production, including fewer new drilling explorations and spending cuts, has resulted in the commodity's prices rising more than 30 percent since experiencing lows in March.
Stall may alter price of gas
The discovery of U.S. shale oil supplies in the past few years not only helped the country's growth in output, but helped oil prices remain relatively low. Because of this, some traders are not happy with the EIA's call to slow production. Their concern is the price of oil; they believe that if production is curbed, cost will soar. Instead, they're suggesting continuing shale output at high levels, which would result in a flatline and steady prices of oil.
The boom in shale oil in the U.S. turned the country into the world's largest fuel exporter. The supply is now needed to rebalance the global inventory since the Organization of Petroleum Exporting Countries chose to maintain a higher level of production.
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AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.
IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.