Oil in Global Economy Series: Key oil market updates

While the oil market continues to focus on supply/demand fundamentals, these are some key updates that you need to keep a tab on,

• U.S. oil rig count: The United States is continuing to see a surge in production. According to the latest report, the production rose to 10.282 million barrels per day. Despite fewer rigs operating compared to 2014/15, the production efficiency has pushed the overall production higher.  As of latest report, the numbers of operating rigs rose from 799 to 800, the highest since April 2015. The numbers of operating rigs have increased more than 150 percent since bottoming in May 2016.
   
• Venezuela crisis: Crisis continues in Venezuela. The latest production report from OPEC showed that the production declined to just 1.6 million barrels per day.  There are unconfirmed reports that February could see another decline and other unconfirmed reports also suggest that China and Russia working together to save Venezuela while the United States is preparing for another round of sanctions.
   
• Saudi Arabia’s desire for the deal: Saudi Arabia is wooing Russia to become a permanent member of the Grand cartel including the 10 countries that have joined OPEC and Russia in production cuts since 2016.  According to OPEC’s communications, there is a working group working on the details of the deal.
   
• Libya’s oil production dwindles: Just after last week, amid a dispute over pay, Libya’s El feel oil field was in shut down taking 70,000 bpd production offline, Libya’s largest oilfield Sahara halted production according to reports. Before going offline, Sahara was producing around 0.3 million barrels per day. According to reports, the halt resulted from the closing of a pipeline from Sharara to the Zawiya refinery

Key global oil benchmarks:

WTI - $61.5 /barrel

Brent - $64.5/barrel

OPEC basket - $61.6/barrel

Urals - $62.2/barrel

Oman - $63.1/barrel

Dubai - $61.5/barrel

Western Canada Select - $37.2/barrel