Market Response to Prediction of Decreased Production

The Market’s immediate response following the predictions of lower production from U.S. shale plays by the EIA was an increase in oil prices. West Texas Intermediate oil futures rose to $38.50 per barrel on the New York Exchange and Brent crude oil futures on the Intercontinental Exchange rose to $40.40 per barrel. “Oil prices rallied due to the expectation of slowing crude oil production from the non-OPEC producers” including the U.S. Oil prices have increased almost 45% since the low on February 11, 2016.