July crude oil futures go away today and it will be up to the August crude futures to find a bottom. As U.S. oil production is showing signs of faltering (up only 12,000 barrels in June as opposed to an expectation of 120,000 barrels) and seeing we are past the pain of many shale producers, U.S. rig counts will slow in coming weeks and we may see the count start to fall. Maybe that is why Saudi Arabia is not so worried about the uptick in oil production from Nigeria and Libya.
The crude oil market had another week of slump and dump as the main event seemed to be the International Energy Agency report about increasing shale output and slack demand for gasoline in the United States that suggests the supply glut may last longer previously thought. For natural gas though we may have hit a bottom after a bullish storage report from the Energy Information Administration and forecasts for hot weather and potential tropical storm activity brewing in the Atlantic Ocean.
A surprise increase in U.S. oil supply as reported by the American Petroleum Institute as well as a report on increased shale oil production from the International Energy Agency has the oil market acting loopy. The IEA predicted that oil supply would outstrip demand next year, with output increases from U.S. shale producers.