WTI Down Again -- May 31, 2017

Second trillion-dollar mistake: see graph below. Oil traders are not impressed. Pushing WTI below $48. OPEC doesn't understand the market. If you only meet "what is already baked into the price" when the announcement is made, the commodity will sink in price. In this case, the market was "hoping" for further cuts, not simply continuation of the same (which hasn't worked); in addition, it's hard to call it a "cut" when production still exceeds what it was before the surge. See graph below. 

Oil down again, today. Down over 2%. Around $48.65. [Later: now, down almost 4% and well below $48. I guess Prince Salman was not kidding: he doesn't care if oil goes to zero. Posted, 10:53 a.m. Central Time.]

Active rigs:

$48.63	5/31/2017	05/31/2016	05/31/2015	05/31/2014	05/31/2013
Active Rigs	50	28	80	189	187

 
RBN Energy: continuing the series -- new infrastructure to help Corpus Christi keep pace with Permian growth.

Market opening: NASDAQ scores another record high. WTI continues to fall; at $48.26.

Global glut: there's a meme out there that "OPEC and Russia will do whatever it takes to 'stabilize' the market." LOL. They can start by looking at this graph:

Note how much higher OPEC production is today -- after the production cuts -- than it was in 2014, prior to the production cuts. I guess it's how one defines "production cuts."