No Way To Enforce Production Discipline On The U.S. Oil And Gas Industry

Another CERAWeek conference has come and gone, producing, as it always does, literally hundreds of stories in the global energy-related media.  But the biggest news related to the oil and gas industry that happened during the week was unrelated to the conference.

That of course was the precipitous drop in the global price of crude on Thursday and Friday, following the report of a record inventory build in the U.S. While this climb in stocks is probably temporary in nature, it was taken as a sell-off signal for long positions by a market that was already nervous about the slow pace of closing the global supply surplus despite the reported high level of OPEC nation compliance with the group’s production limits agreed that became effective on January 1.

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