As Texas slowly normalizes from Hurricane Harvey’s impact, production has rebounded but the rig count continues to tumble (down 7 to 749 this week). This is the biggest weekly drop in oil rigs since Jan 2017 and June 2016. WTI Crude futures have once again tested $50 (and failed) this morning.
This is the 5th week in a row with no increases in oil rig counts.
The massive collapse in US crude production last week – with most of Texas offline – has recovered somewhat with a 572k surge in production this week. However, it is clear that levels of production are well off pre-Harvey levels…
WTI retested $50 this morning, and failed, but RBOB gasoline is on the rise…“The dollar is once again weakening and that is adding some support to oil too”
However, some remain bulish – “The market is realizing that demand is a lot stronger than there was given credit for,” says Phil Flynn, senior market analyst at Price Futures Group. “The untold story hidden behind the glut has been the demand growth”