Crude and Refined Fuel Product Prices Fall
July 19th, 2019
The Baker Hughes Rig Count showed that the crude oil rig count fell by 5 last week to a total of 779 and has fallen by an average of 2.5 rigs per week over the last four weeks. The total crude rigs at 779 is the lowest level since February 2, 2018. The EIA in the weekly inventory update said that total US production dropped by 300,000 bpd. Some traders suggest that the shutting down of rigs in the Gulf because of Tropical Storm Barry was a part of this lower number.
Prices were up on Friday and open higher as trading started Sunday night as the news about Iran seizing a British oil tanker became known to the world. Tension with Iran have been high and are higher this morning as this looks like retaliation for the tanker capture of the coast of Gibraltar earlier this month. There is a growing list of actions that have transpired in the Persian Gulf that have raised tension on several fronts but many are trying to calm things down and work things out diplomatically. All of this of course keep energy market and traders very nervous.
There are also reports today that a Venezuelan pilot buzzed a US jet as Venezuela claims the US jet was in its air space. This seems a bit strange but Iran and Venezuela are dealing with a lot of issues and they may be getting a bit desperate. Of course all of this continue to keep the energy markets on alert. The Iran action over the weekend has probably put a bottom into the oil market near term. The headlines will be watched to see what Brittan’s response will be to its seized tanker. Also the US’s posture on all these issues as our pulling out of the nuclear pact has been the driving force behind all these issues.