Daily LNG price update (glut)

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The oil price fell again last night with Brent down another 2.5% to $56.09 as I write. The culprit was a huge surge in US stockpiles, much more than expected, which has that nations swimming in the black stuff:

20150211_crud3

The culprit is surging production:

20150211_crud4

This is entirely to be expected. As the margin and capital squeeze hits shale oil producers, they will respond with mass cost cuts and a charge towards higher volumes to make up for lost prices. It will run until the combined falling rig count and rapid well depletion rate combine to pull back the production increases, which ought to be around May.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.