Week of March 14, 2016
- Brent climbed above $40/bbl on Saturday as Bloomberg reported that futures traders have shifted attention away from growing inventories and onto falling production.
- That switch may help put a floor under oil prices as non-OPEC supply falls.
- Iranian production has grown slower and been less disruptive than expected.
- The Wall Street Journal reported that U.S. energy executives chose not to cut output despite falling prices as their bonuses are based on production and reserves growth and not on profit.
- The Wall Street Journl also reported that output in North Dakota’s Bakken oil fields is now declining sharply, but producers are deferring production from completed wells until oil reaches $40/bbl and will start drilling again when oil reaches $50.
- This strategy could help keep oil in the $40 to $50/bbl range over the next few years.