AAA Daily Fuel Gauge Report for Friday, 1/20/23

Futures dropped as much as 1.2 percent in London, extending Monday’s decline. Uncertainty over the outcome of Thursday’s meeting is creating the risk of a slide in prices, which have gained on assumptions that the curbs will be prolonged for nine months, according to Goldman Sachs Group Inc. OPEC backs such an extension but is still waiting for commitments from Russia, according to people familiar with the matter. Crude surged earlier this month on signs the Organization of Petroleum Exporting Countries and its partners will prolong cuts aimed at shrinking a global glut. Prices, time spreads and hedge-fund positioning all reflect a high probability the group will follow a Saudi proposal to extend the pact to the end of 2018, Goldman said. Yet Saudi Energy Minister Khalid Al-Falih said Tuesday that it’s too early to talk about the duration. Click Read More below for additional information.

Weekly U.S. crude oil production hit the highest level on record last week, according to preliminary government data, in another sign of the resilience of American shale drillers. The United States produced 9.62 million barrels of oil a day in the week through Nov. 3, the U.S. Energy Information Administration reported on Wednesday. That just slightly topped a record high struck in June 2015, just before the oil price crash sparked a more than one-year decline that sent U.S. output to about 8.4 million barrels a day. Click Read More below for additional information.

Futures were little changed in New York after rising 4.7 percent last week. The curbs have contributed to stability in the market and should remain, Iraqi Oil Minister Jabbar al-Luaibi said Saturday. Yet, Brent crude at $70 a barrel may be giving fresh stimulus to U.S. shale-oil drillers to boost output, according to the International Energy Agency. Oil has extended gains after a second annual advance as the Organization of Petroleum Exporting Countries and its allies curb supply to drain a global glut. Though they have said the historic deal will run until the end of this year, OPEC is “very likely to cut short” the pact if markets become balanced, JP Morgan Securities said in a report. Click Read More below for additional information.