We could be at a tipping point for oil production in the
U.S. This week saw a drop to 9,038,000 bbls oil per day. U.S. production
has not been below 9,000,000 bbls per day since Halloween 2014.
In the next two weeks, we could go below that key production
level and that could have a big psychological impact on the crude
market.
I usually don’t give much importance to the rig count – but
this is getting to be too big a story to ignore. We are at the
lowest rig count since WWII in the 1940’s. That is going to have severe
consequences for U.S. oil production in the very near term.
There are a lot of moving parts in the oil supply, oil
demand and overall energy industry. The chart of the rig count
decline could very soon look just like the production decline. We al know it
is going to happen - the big question is how far and how fast will crude production
decline.
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