Oil Prices Snap Bearish Sequence, OPEC Sees Rebalanced Energy Market

Crude snaps a three-day losing streak as the Organization of the Petroleum Exporting Countries (OPEC) insists the energy market will be rebalance in 2018.

OPEC’s Monthly Oil Market Report appears to be grabbing market attention as United Arab Emirates Energy Minister Suhail Al Mazrouei , the group’s current president, argues the pickup in shale output will not be ‘a huge distorter of the market’ even as U.S. production hits record-highs.

Efforts by OPEC and its allies to curb supply are likely to keep oil prices afloat as ‘demand for this year is expected to be good, if not better than 2017,’ but a further pickup in Non-OPEC production may drag on oil prices especially as the U.S. Energy Information Administration’s (EIA) warns ‘the United States is projected to become a net energy exporter by 2022.’

As a result, market participants may pay greater attention to U.S. field outputs rather than the weekly updates to the oil inventory figures, and OPEC and its allies may ultimately come under pressure to extend its rebalancing efforts beyond this year as ‘U.S. crude oil production in 2018 is projected to surpass the record of 9.6 million barrels per day (b/d) set in 1970 and will continue to grow as upstream producers increase output because of the combined effects of rising prices and production cost reductions.’

USOIL Daily Chart

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