Lowered expectations: OPEC has cut its oil production forecasts for states like the U.S. that are not members of the cartel. The group announced this morning it has lowered its forecast for daily oil supply growth this year from nonmember states by 72,000 barrels a day to 880,000 due to lower than expected output in the U.S. For next year, it trimmed its forecast by 110,000 barrels to 160,000. The cartel also increased its forecast for global demand growth this year by around 84,000 barrels a day to 1.46 million, and by 50,000 barrels to 1.29 million for next year.
The silver lining: In shale strongholds of North Dakota and Texas, physical crude grades are trading at the highest premiums to futures prices in years, offering a glimmer of hope that a pickup in global oil markets might follow. While crude futures hover around 6-1/2-year lows, Reuters reports the cash markets, where producers and refiners buy and sell physical barrels of oil, are sending a more optimistic, if short-term, signal. West Texas Intermediate crude delivered to Midland, Texas, is trading at a record $2.75 premium to benchmark U.S. futures. North Dakota’s Bakken crude fetches more than 50 cents more, the highest in two years. The two areas produce more than 60% of U.S. shale oil. Read the full story.
Checking out: Starting next year, the IRS says it will reject all checks for more than $99,999,999 because check-processing equipment at the nation’s Federal Reserve banks can’t handle checks that big. The Associated Press reports checks of $100 million or more have to be processed by hand, increasing the risk of theft, fraud and errors, according to a pair of memos from the IRS and the Treasury Department. As a result, the nation’s wealthiest will have to wire their tax payments electronically or write multiple checks for less than $100 million apiece. Read the full story.
