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Shell Versus Shale

Who says that the U.S. oil supply picture in not getting in balance? Oil supply in the US fell by 7.2 million barrels down over 50 million barrels since the end of March. It would have been over 60 million barrels if it were not for the reclassification of oil released from the Strategic Petroleum Reserve. That puts supply at the lowest level this year and 7.1% below last year. US crude production faltered last week, a sign that US shale producers are getting wobbly. Yet Shell posted better than expected blow away earnings as opposed to shale firms that are struggling to stay solvent.

Shell (RDS-A) revenue came in at $72.13 billion vs. expected $67.78 billion, according to Reuters in a bright spot for bigger oil. Shell made money on reefing as strong margins and growing demand against a backdrop of near record productions for products boosted the bottom line. Reuters reported that Shell’s net profit (on a current cost of supplies (CCS) basis) at $3.6 billion, up a whopping 245 percent from $1 billion for the second quarter of 2016. Shells CEO said that Shell promised to "remain very disciplined" to...