April 23 Weekly Update

4/23 – Nymex crude oil futures hit a 15-year low of $26.21 per barrel in Feb 2016. But it’s been a steady upward climb ever since , with crude closing at $68.38 on Friday. A strategic reduction in output by OPEC and Russia, and ongoing instability in Venezuela, has wiped out the world supply glut that was depressing prices. The global crude oil “surplus” has declined from 400M barrels to just 43M over the past 2 years. Texas’ oil-rich Permian Basin is increasing output, but producers are bumping up against congested pipelines and shortages of materials and workers. Higher costs and transportation difficulties have cut profits and soured investors. Crude oil futures are expected to top out in the $70 range May/June before backing off by late summer. U.S. gasoline prices are in the $2.70 range, $.30 per gallon higher than a year ago, and look to top $3.00 this summer.