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Oil Prices Fall As US Ramps Up Oil Production

No, it’s not the “trade war,” it’s the fundamentals

Silhouette three oil pumps

An article from Reuters tries to spin the recent fall in oil prices as negative news, and say that the trade war is causing oil futures to decline (so therefore, cheaper oil and gas is a bad thing).

But later on in the article, a much more plausible explanation for the price declines are given:

Crude prices have also been under pressure from a much smaller-than expected decline in U.S. stockpiles and U.S. crude oil production’s return to its record 12.3 million barrels per day.

The U.S. Energy Information Administration (EIA) said U.S. crude stocks fell by around 300,000 barrels last week, to 476.49 million barrels.

That was much less than the 900,000-barrel decline analysts forecast in a Reuters poll and well below the 5.3 million-barrel drawdown the American Petroleum Institute (API) reported on Wednesday.

Meanwhile, top oil exporter Saudi Arabia has raised production in May, a Reuters survey found, but not by enough to compensate for lower Iranian exports which collapsed after the United States tightened the screws on Tehran.

With both the Saudis and the US stepping up production, it’s no wonder oil prices are falling again. The days of $100+ dollar oil are over. The world is awash in abundant stocks of oil, even with Iranian and Venezuelan oil production effectively offline.

 
Doomberg

Written by Doomberg

I am Doomberg, one of the original founding members of Sparta Report, and have been here since the beginning. I am an insatiable news junkie and enjoy reading and writing about the US territories, the Caribbean, video games, smartphones, and of course conservative politics in general.

I also really like pictures of gas stations and claim full responsibility for the silly gas station motif. I'm presently trapped behind enemy lines in a blue state with no hope of escape! The ride never ends.

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