While markets have been focussing on OPEC production in recent weeks, US producers have moved to dampen bullish enthusiasm
As the chart below shows, US production levels have been revised up significantly in the New Year. Daily production has risen about half a millions barrels in recent months and this is before, OPEC’s production cuts come into effect
US Oil Production (source: Bloomberg)
Markets had been anticipating that production increases would be limited unless prices rose to improve the profitability of shale oil production. However, US production is already about 0.2m above the average for last year and will presumably get even larger if the oil price does rise.
This may serve to lower the range for the oil price for a while; even assuming OPEC does cut production which I believe is likely.
Crude Oil Brent chart
The Brent chart looks to have established a trading range as outlined on the chart below. As things currently stand if it rallies to but again fails at resistance around $58/$58.50 that may present a selling opportunity looking for a return to the support or break below it.