Oil prices fell on Wednesday after the surprise surge in US crude oil exports reached a record 2m. barrels per day. The news shook worries about global oversupply, which has fallen in the last few weeks. Yesterday, the US Department of Energy announced the size of US oil reserves, but despite the fall in stocks, the price dropped against a background of strong export growth. Looking at the US export chart, it is clear why oil is reacting to expectations. For the past three weeks, US exports have increased from 143,000 barrels per day to 1,984,000 barrels. This is a 1300% increase in just a month.
Expectations from market participants are that black gold will react more strongly to US exports than oil reserves in the country.
The concern of the weak bulls is that a large increase in US exports and shale oil production will be able to undermine OPEC's efforts to reduce supply.
Despite these facts, members of OPEC and other oil-producing countries believe the market is rebalancing, and efforts to cut back will result in the future.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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