Crude concerns

John Weyer Energy, General Commentary

Crude Oil Hits $70 for the first time since 2014

The recent run up in crude oil continued on Monday , with crude oil futures nudging above $70.00 for the first time in 3 1/2 years. June crude put in a high of $70.84 before falling under $70 a barrel later in the session. The supply story appears to continue to give the market concerns,while global politics are starting to make waves at the same time.

OPEC levels remain in check

On Friday, S&P Global Platts released a survey on OPEC production.  For the third straight month, production fell , this time to a one year low. Production was down 140,000 barrels a day in April vs March, to 32 million barrels.  That is almost 800,000 below the OPEC production cap agreement.


Driving Demand

These cuts and lower production levels come as we approach the high demand “driving season” here in the United States. Stronger economic numbers, and economic growth are also putting greater demand on crude. An old fashioned supply vs demand is at play. Depending how trade war/tariff talks go, this could die down if China decides to play hard ball.


Politics as usual

Iran is at the forefront again. The U.S. must decide whether to continue the current agreement, that lifted economic sanctions on Iran by Thursday. A tweet from President Trump announced that he may reveal that decision on Tuesday, and crude broke below $70.00 shortly after. Iran has also been the X factor in the OPEC deal. They have been wanting to increase production since hte sanctions were lifted. If they do, that may make it tough for crude prices to keep climbing.



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John Weyer


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