The crude oil price moved closer to its lowest levels in 2018

Fast forward to today and OPEC is holding to its production cap and member countries have showed discipline in obeying their limits.

Crude oil market has many players/dynamics to consider and could turn volatile on any geopolitical events.

He said that Sinopec was looking to order more United States crude this year. But the two countries are embroiled in a political dispute, and the U.A.E. decided in June to ban all petroleum ships from Qatar.

Conditions are ripe for OPEC to say enough is enough, there’s no longer a need to inflate prices. Demand is increasing and storage levels are dropping significantly.

China’s crude oil and other liquids production dropped the most among non-OPEC nations in 2016, and the EIA expects production to have booked the second-biggest such drop past year.

Bjarne Schieldrop, chief commodities analyst at SEB Markets, said oil markets continue to be in a “kind of shale oil denial” that is still supporting prices.

“All the demand data I keep seeing – manufacturing activity, Europe, the U.S., Asia – demand is going gangbusters right now”. Economic recovery generally rides on the back of consumption spending as job growth leads to higher consumer outlay.

Abu Dhabi reportedly decided on the purchase of 700,000 barrels of light domestic crude because of the high quality of American condensate, which is more suitable to the Arab nation’s refineries.

Meanwhile, the USA remains the world’s biggest oil consumer, but with the most recent jump in production, its crude imports showed a decline, while inventories increased last week. The catalyst behind the selling pressure is Iran’s plan to boost production and record USA crude output. Oil prices hit a one-month low during the trading session following reports of a rise in US shale output. Oil is also being buffeted by “ripple effects from the risk-off move in equity markets”. While the markets have embarked on a long expected correction spooked by fears of a higher interest rate regime in the United States, the better-than-expected wages data that sparked higher interest rate fears has also led to a further strengthening of the U.S. dollar. “This makes commodities more expensive to buy, hence oil futures get sold off”, he added. The U.S. could become a net petroleum exporter by 2029, the EIA said this week. Many poorly managed smaller shale oil producers with high debt that should have gone bankrupt after the oil crash in 2014 are still hanging in with banks reluctant to write off massive losses still extending life lines.

In the context of what happened to the Dow Jones Industrial Average over the last few days, on the other hand, the declines in WTI and Brent are relatively modest. They will continue to manage supply.

“We are feeling good about the overall sector, we are feeling good about the space”, said Lisa Shalett, head of wealth management investment resources and head of investment & portfolio strategies at Morgan Stanley Wealth Management in NY.