Crude oil prices are trying to recover on a weak dollar after selling off yesterday on the August oil future contract expiration. Also on a prediction by the Energy Information Administration (EIA) that US oil production would rise by 113,000 barrels a day to 5.585 million barrels a day in August from July, even as they overestimated Junes production by a wide margin.
Crude oil prices have been creeping higher four days in a row as OPEC plans an “emergency technical meeting” July 24. The move is tentative as the market is still buying into the invincibility of shale oil production and this myth that the global oil market is not balancing. The International Energy Agency tried to feed into that myth by suggesting that OPEC compliance is slipping, offsetting what is a surge in global oil demand.
Despite a record drawdown from U.S. oil inventories and the fact that Saudi exports to the United States are at a 30-year low, the International Energy Agency is backtracking its prediction of a global oil market rebalancing because of an increase in OPEC oil production.
Crude oil prices are getting a wake-up call after a lowering of the U.S. oil production outlook--a report of a major drop in U.S. oil supply and a warning by S&P to oil majors cut to back more and reduce debt levels or face downgrades.