Oil struggled late last week but is back on the upswing today, rising $1.49.
A report confirmed Russian planned production curbs and that’s helping but I think this is more of a technical move and a bounce from the old range top.
WTI crude oil daily
Here’s a chart from Ted Cross highlighting how more than 4 million barrels of US production was brought on in the past 18 months. It highlights the shale treadmill.
If drilling were to stop today, the US would lose almost 6 million barrels per day of production by 2026.
Now that also swings both ways. Producers have preached discipline this year but as prices climb to $85 or $90 per barrel, there is an increasing temptation to turn up the taps.
On net, it points to an ongoing market in the $70-90 range. That’s the consensus and barring some kind of OPEC breakup or a supply shock then it’s tough to argue against.