The International Energy Agency came out with an “explosive” report talking about “explosive” production growth as the United States will become the undisputed leader in global oil production. Take that Saudi Arabia and Russia! The agency that is known by traders as the agency that has way underestimated, is now proclaiming the United States as the new global energy powerhouse, a moniker by the peak oil freaks and the Obama Administration that was thought to be impossible.
Now you see it. Now you don’t. Presto, change-o the U.S. oil glut has disappeared. Low crude prices and a booming global economy have caused the biggest oil glut in history to disappear before your very eyes. The American Petroleum Institute reported another massive 5.121 million barrels drop in U.S. crude supply dragging stockpiles back to the lower end of the average range for this time of year.
The Energy Information Administration (EIA) released another EIA Drilling Activity report that raised its estimates for shale oil production without considering the realities on the ground. According to the report, the EIA says that U.S. shale oil production will increase by 111,000 barrels a day to 6.55 million barrels a day in February next month, and that production in the Permian Basin will surge by 76,000 barrels a day.
Brent Crude crashed through $70 a barrel and WTI just shy of $65, shattering another glass ceiling many oil bears said was impossible to ever see. This came as OPEC said it has no intentions to relent on production cuts and overshadowed rising rig counts. Even as the market gets a little turn around Tuesday profit taking, the oil bears are having to throw in the towel.
Oil prices pulled back after Brent crude hit its $70 per barrel objective and Chinese crude oil imports hit a record high but was a bit shy of expectations, but still strong as global demand is surging, global supply is falling and then there is the dollar.