Starting on July 24th, crude oil saw another week of gains. After starting off at USD 46.24 on Monday, WTI ended the week at USD 49.71, which represents a weekly gain of 7.3%.
U.S. Crude Oil Inventories fell by 7.2 million barrels last week, marking the fourth straight week of declining inventories at a time of the year when they typically rise. The Baker Hughes Rig Count, which tallies the number of active drilling platforms, rose from 950 to 958.
Rising crude oil prices are also linked to signs of slowing U.S. production, which were reported by Halliburton (NYSE:HAL) (HAL) and confirmed by the larger-than-expected quarterly losses from Anadarko (NYSE:APC) (APC). The company also noted that it would cut its capital spending by USD300 million for 2017.
We are continuing to monitor the outcome of the election in Venezuela and its effects on crude oil prices. Condemned by the United States, the European Union and most South American nations, the election was intended to establish a Constituent Assembly made up entirely of members of Nicolas Maduro’s socialist party. The Constituent Assembly would have the ability to dissolve the opposition-held National Assembly and change the country’s constitution. Over the past week, U.S. President Trump promised on social media to punish members of the Venezuelan government if the vote took place. One of the measures that is expected to be considered is a ban on Venezuelan oil exports to the United States (Venezuela exports 750,000 barrels per day to that country). This could have enormous repercussions for one of the world’s largest oil producers and a key member of OPEC.