I imagine there is some point at which US producers shut down some wells to provide price support.
I read a comment in the WSJ the other day by a reader which said the US should produce much more oil and use the proceeds to reduce our national debt. There is so much wrong with that statement!
The article:
Economic fears have recently rattled the U.S. stock market. Now it's oil's turn.
Crude prices tumbled more than 4% Tuesday to their lowest level since December 2021 after the Saudi-led OPEC cut its growth projections for the world's appetite for oil.
Benchmark U.S. futures closed at $65.75 a barrel, down 4.3% on the day.
The cartel lowered its outlook for demand growth this year by just 80,000 barrels a day, to about 2 million barrels a day. But traders are taking note in part because OPEC tends to be much more aggressive in its demand projections than other forecasters.
Factoid: The world consumed 100 million barrels of oil per day in 2023, an increase of 3 percent over 2022.
The wavering outlook comes as mounting economic uncertainty in China and the U.S. ripple through commodities markets. As oil prices have veered lower this summer, battering energy stocks, prices for copper and iron have also declined. Depressed lumber demand has pushed American and Canadian producers to shutter sawmills.
The weaker oil market has has provided relief to Americans at the pump, with AAA on Tuesday putting the average U.S. retail price of regular gasoline at $3.26 a gallon, 15% lower than a year ago. Futures markets suggest there will be more price cuts to come.
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