“If you are a producer in Texas, you have to be happy with the fact that there is a swing supplier in the market that wants to keep prices supported,” said Matt Smith, director of commodity research at ClipperData.Fears about oversupply sent US oil prices plunging into a bear market last week. Those concerns were driven in part by developments in the United States.
First, US shale companies ramped up production faster than anyone anticipated. US output topped 11 million barrels per day in August for the first time ever.
Second, the Trump administration granted temporary waivers to China, India and other countries to keep buying oil from Iran. The softer-than-expected approach prevented sanctions from knocking too many Iranian barrels offline.