The oil market's rally from its lows depends on falling U.S. oil production, so crude futures might normally have bounced big time Wednesday when weekly government data showed the lowest production in 13 weeks.
But traders were quick to see that the decline was actually due to a temporary decrease in Alaskan output, not the drilling of the 'frackers' who have helped create a global glut with huge amounts of new supply from places like North Dakota and Texas in the last several years.
That is important since current prices have built-in expectations that U.S. production has peaked and will head lower after a grueling price war. According to the Energy Information Administration, there was a drop in U.S. oil production last week to 9.26 million barrels a day, the lowest level since Feb. 6.
Production was 9.37 million barrels a day the week earlier, after reaching a high of 9.42 million barrels a day March 20.