Crude Oil
The U.S. oil industry, known as "Big Oil", is seeing growth in production and mergers. Active drilling rigs increased to 502 for oil and 122 for gas last week, marking a second week of growth. Daily oil production has hit a record 13.2 million barrels per day.
Crude oil stocks are 4% lower than last year, possibly encouraging more investment in oil production. The U.S. government's decision to buy oil for its Strategic Petroleum Reserve may have also played a part.
Chevron is buying Hess for $60 billion, following Exxon Mobil's acquisition of Pioneer Natural Resources for $58 billion. The easing of sanctions on Venezuela could benefit U.S. oil producers with operations there.
Long-term factors like Middle East conflicts and potential supply disruptions are encouraging investment in U.S. oil production. Despite this, OPEC+ countries are limiting production to maintain prices.
This could signal a shift from focusing on profits to a battle for market share, a challenging task given years of record interest rates. However, major players with substantial capital reserves and strong government lobbying power are now involved.
Crude oil prices are currently testing the lower boundary of a bullish channel, with the Stochastic oscillator indicating an oversold market condition. If prices manage to settle below this critical level, we could see a continuation of the downward trend, potentially reaching the S2 support level around $83.