The U.S. has record high production levels while Russia and Saudi Arabia have also increased their output. This has helped offset and near-term supply threat, while the U.S. has given waivers to 8 nations who rely on Iranian crude oil. Looking technically, we have been down 12 straight days with key support at $55.
We should see producers cut back on production which theoretically would lead to support and a turnaround in the market. I think $75 is too high and $55 is too low so $60-65 seems like a favorable target. There was a proposal by Saudi Arabia over the weekend to cut production by 1 M/B/D which could come to fruition. Looking at the top three producers right now, Russia is producing 11.4 m/b/d, U.S. is producing 11.6 m/b/d and Saudi Arabia is at 11.2 m/b/d. The Rig Count is 886 at the highest level since March 2015.
Crude Oil Dec ’18 Daily Chart