US Oil Rig Count Up For 15th Straight Week

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Putting everything together, in addition to data regarding rig counts, domestic USA production increases and the continued noise out of OPEC, it is fairly clear that there is going to be a glut of product on the market as we enter the so-called summer driving season this year, which should mean that the product tail will continue to wag the WTI dog well out into the foreseeable future. With the oversupply proving hard to shift, OPEC is expected to prolong the agreement. Stocks, however, are still seen about 10 percent above year-end levels.

And analysts expect US production to keep rising this year.

Experts are cautiously optimistic that the Organisation of Petroleum Exporting Countries can finalise another production output deal as the relentless advance of United States shale puts further downward pressure on prices.

US Oil Rig Count Up For 15th Straight Week

"The Opec market share battle hasn't gone away", he said. "It would also lower compliance with the OPEC deal, which is also a possibility as the current reductions in output are taxing for many producers' budgets, and an extension could motivate some of them to cheat". Those cuts have yet to translate into lower stockpiles.

"Another six months would definitely give OPEC a chance to hold on", says Nik Burns, commodity analyst at UBS.

According to Gadfly's Liam Denning, Walt Disney Co (NYSE: DIS)'s movies are more suspenseful than the upcoming OPEC meeting since OPEC has no choice but to maintain its agreement to lower oil supply for several obvious reasons. The production decrease is working, and the market is moving toward equilibrium, he said.

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In a sign that the higher oil prices are helping Saudi budget revenues, reports suggested last week that Saudi Arabia had reinstated perks for civil servants, after revenues for the first quarter turned out higher than expected.

Even Britain has benefited as China has dramatically increased its purchases of North Sea oil in the first quarter of 2017, compared to the same three months of a year ago, as a side effect of the OPEC production cuts.

There seems to be a consensus that the effort to curb supply should be extended, Saudi Minister of Energy and Industry Khalid Al-Falih told reporters Wednesday in Baku, Azerbaijan.

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The Saudis may demand that Iran also cuts output and insist that non-complying members (such as Iraq) finally get in line as a condition to roll over the cuts, S&P Global Platts reported in March, citing people familiar with the Saudi thinking.

In addition, US crude output C-OUT-T-EIA is at its highest since August 2015, while the Syncrude Canada oil sands project has started shipping crude from its Mildred Lake upgrader again after cutting production due to a fire in March.

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