Market Report & Analysis for 7/10/2018 Morning Edition

Morning Market Overview

Oil prices drifted lower last week after a mixed trading session on Friday. The market was mostly focused on Saudi Arabia increasing production and lowering their official selling price (another indication that they want to make their grades attractive). The market remains uncertain as to which direction will win out… loss of production in places like Venezuela, Iran, Angola, and others or the increase in production for Saudi Arabia, Russia and the rest of the OPEC producers.

Oil prices are off the highs hit at the end of June but still well above the level they were trading at when OPEC concluded their meeting agreeing to increase production about 1 million bpd. Since then Saudi Arabia also indicated that it would basically increase production as much as needed.

So far, the market is more concerned with the loss of production rather than the pledge to increase exports. Friday afternoon the latest Baker Hughes data hit the media airwaves reporting the number of rigs deployed to the US oil sector increased last week by 5 rigs after decreasing during the previous week. Total rigs deployed to the oil sector are higher by 100 or 13.1 percent year over year. US crude oil production continues in an uptrend setting new production records on a weekly basis.

Total US crude oil production is about 19.5 percent above where it was for the same week a year ago. This week’s production came in at 10.917 million bpd.