The release of US drilling data should show the extent of the slowdown in the US shale oil industry, according to strategists at ANZ Bank.
Key quotes
“Kuwait said that it had already started cutting production ahead of the planned 1 May start of the recent OPEC+ supply agreement. Algeria also told OPEC it would be cutting immediately.”
“EIA data showed total production had fallen to 12.2mb/d, the lowest level in the weekly data series since July 2019. The number of drill rigs active in the US is now well below that required to maintain production. This will see a natural decline in US output in the weeks and months ahead.”
“Signs of stress in the market remain. Tanker rates have skyrocketed in recent weeks as the industry turns to floating storage. Inventories at Cushing, the pricing point for WTI crude, are nearing capacity of around 76mbbls.”
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