Investors may have driven crude oil futures prices above $50 a barrel and amassed large bullish positions in expectations of further gains to come but their optimism isn’t shared by the people who produce, refine, ship or trade the real stuff on a daily basis.

They inhabit a very different world in which there is plenty of oil sloshing around and buyers can get cargoes of crude at discounts to their official selling prices. Neither do they see much of an impact anytime soon from plans by members of the Organization of the Petroleum Exporting Countries (OPEC) to cut production from record highs as they seek to rein in two years of oversupply.

Ian Taylor, chief executive of commodities trading giant Vitol, told Reuters this week that there is more physical crude around than the futures prices are indicating.

Investors may have driven crude oil futures prices above $50 a barrel and amassed large bullish positions in expectations of further gains to come but their optimism isn’t shared by the people who produce, refine, ship or trade the real stuff on a daily basis.

They inhabit a very different world in which there is plenty of oil sloshing around and buyers can get cargoes of crude at discounts to their official selling prices. Neither do they see much of an impact anytime soon from plans by members of the Organization of the Petroleum Exporting Countries (OPEC) to cut production from record highs as they seek to rein in two years of oversupply.

Ian Taylor, chief executive of commodities trading giant Vitol, told Reuters this week that there is more physical crude around than the futures prices are indicating.

But, while the focus is on OPEC’s proposed cut, with Russia possibly joining, others warn output is creeping up elsewhere.

Eikon data shows that the amount of U.S. rigs drilling for new production has steadily increased since May.

“Productivity has surprised on the upside… and with the rig count slowly climbing upwards one can be cautiously optimistic that the U.S. shale industry is gearing up for a recovery,” said Ted Young, chief financial officer of Dorian LPG, one of the world’s biggest shippers of liquefied petroleum gas (LPG).

Source: www.reuters.com