Tuesday, June 20, 2017

Oil sewering Major

A fundamental reason for the weakness in oil prices is record global crude oil inventories. These record inventory levels resulted from two primary causes.

The first is that since 2008, the U.S. shale oil boom has put about five million barrels per day (BPD) of additional oil on the markets. OPEC decided that instead of attempting to balance the market, it would defend market share. Over the next two years, the group added two million more BPD of crude into an already oversupplied market.

The world built a massive oversupply of crude oil, and that oversupply simply continued to grow.