Crude Oil Market Monitor

Weekly analysis of the fundamental factors of the US and global crude oil markets: supply, rigs count, demand, inventories, SPR, prices and open positions of traders.

Crude Oil Prices

It's -100% up from the 5 year bottom of 52,147 contracts and below the middle line in the 5 year coridor which implies downside pressure for the oil price.

Global Crude Oil Demand and Production

For the quarter ending March 31, 2025 world oil demand is forecasted at 0.00 mln. bpd, production at 0.00 mln. bpd so inventories change is expected at 0.00 mln. bpd. This implies oil price will have a pressure toward stable behavior this quarter.

Crude Oil Inventories

Inventories are defined by supply and demand balance. If oil supply is higher than demand than inventories are growing. If oil demand is bigger than supply than oil inventories are declining. These moves of oil inventories have a direct impact on oil prices, usually more direct than change in supply or demand per se.

Also, it's worth taking into account that inventories cannot be zero or even close to zero. Every storage capacity has a minimum level which should be maintained. And at the same time inventories have a maximum capacity level beyond which oil cannot be stored or a long time and money are required to add new oil storage capacity to the market. So even a small decline of oil stocks like 5% is considered a big change and leads to oil prices growth. And vice versa with inventories growth.

OECD commercial crude oil and other liquids inventory is expected to reach 2,844 mln. barrels on December 31, 2024.

US Crude Oil Production

Number of oil rigs characterize drilling activity which in turn defines the number of oil wells which will come to the market in the near future. This makes oil rig count a leading indicator of oil production and is a closely monitored parameter of an oil market.

The number of oil rigs in the US regions with the most active drilling activity is the following as of January 01, 1970: Permian rigs, Eagle Ford rigs, Cana Woodford rigs and other oil regions rigs.

Key US Tight Oil Regions

US tight oil regions play a key role in US oil extraction. Nearly 70% of oil is produced in these regions. Tight oil is characterized of fast capex cycles (weeks from drilling to production) and fast depletion (some sources say production from shale wells typically falls 65% to 90% over the first year). As a result, this tight oil production capacity can come fast to the market in case of high oil prices and can leave the market soon in case of price drops. So, US oil production in tight oil regions is the key parameter to monitor to understand whether overall US oil production will grow or decline.

US tight oil production by regions as of January 01, 1970 is the following: Anadarko 0 th. bpd, Appalachia 0 th. bpd, Bakken 0 th. bpd, Eagle Ford 0 th. bpd, Haynesville 0 th. bpd, Niobrara 0 th. bpd and Permian 0 th. bpd.

Below is the map with locations of key regions where US tight oil is extracted.

Notes

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bpd - barrels per day
bbl - barrel, barrels
th. - thousand, thousands
mln. - million, millions
YTD - year to date