OPEC crude oil production surged by roughly 1 million barrels per day in March after consecutive months of decline:
Meanwhile, there is some question about US production declines as the data doesn’t paint an entirely clear picture. Production is expected to peak in the next couple of months as demand begins to uptick for the summer driving season, however, the recent rally may have already priced in this impending supply/demand shift.
Judging by the narrowing in the crude futures contango there may not be much upside above $65/barrel over the next 12-18 months as producers aggressively hedge future production:
It’s likely that WTI crude oil price paradigm with $40-$45 representing the marginal cost of extraction downside extreme and $65 representing the upper price boundary at which more than ample supply is available.