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 10.407 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 800 to 804, 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 suggests that the production declined to 1.548 million barrels per day. The production has been declining steadily since 2014 when production reached a peak of 2.9 million barrels per day. Unconfirmed reports suggest that the production is declining more rapidly in March.
   
• China launches Yuan-based oil contract: Finally, the yuan-denominated oil contract went live in China from today, 26th March 2018. Almost 15.4 million barrels of Shanghai’s most-active September contract changed hands in the 2½-hour morning session to 11:30 am, which initially eclipsed volumes traded in May contract.   
   
• Geopolitical tension drives the price higher: oil price has been edging higher over the past few weeks as the market speculates that President Trump is likely to move the United States out of the Iran nuclear agreement.

Key global oil benchmarks:

WTI - $65.8/barrel

Brent - $70.5/barrel

OPEC basket - $66.4/barrel

Urals - $68.5/barrel

Oman - $69.1/barrel

Dubai - $66.5/barrel

Western Canada Select - $42.4/barrel