After holding around $104 a barrel since the end of last week, New York oil futures fell to 102.72 on Wednesday following analysts’ predictions of an increase in US crude stocks. As this is a holiday week, the stocks report is delayed until Thursday morning. For what it is worth, the Wall Street Journal’s stable of oil analysts expects crude stocks will have increased by 100,000 barrels over last week while Bloomberg’s analysts say it will be 500,000. The API’s survey says US crude stocks increased by 3.49 million barrels, but that stocks at Cushing fell by 1.5 million.  
In contrast to oil, US natural gas prices have been surging on forecasts of unusually warm weather for at least the first two weeks of June. With US natural gas stocks at record lows, traders are carefully watching how much gas is being injected into storage each week this summer in order to make up for the deficit before next November. The five-year average for additions to stocks at this time of year is about 93 million cubic feet, but analysts say that at least 113 million will be necessary to make up for the deficit.  The EIA’s official report is also due out on Thursday.
There has been an unusual amount of discussion in the financial and oil industry press lately about the difficulties facing companies drilling for shale oil and gas. A survey of 61 companies drilling in shale shows that debt has doubled in the last four years while revenues have climbed 5.6 percent.  Bloomberg says the list of shale oil drilling companies that are financially stressed is “considerable,” with interest expenses eating up revenues at an increasing pace. Even Rigzone, a perennial industry cheerleader, is starting to give both sides of the shale story.  After quoting a couple oil industry leaders who see many years or even decades of increasing shale oil and gas production ahead, they also note those who say the industry is facing serious challenges in maintaining oil and gas production. Among the “challenges” are the need to increase drilling at a time when sources of capital are drying up; the need to find new oil plays other than the Bakken and Eagle Ford; the need to reduce costs of production; the availability of water; and increasing federal regulation of everything from emissions, to ground water, to railroads. It seems that a few in the financial press are starting to see the writing on the wall and are at least hinting of troubles ahead.

The seemingly successful Ukrainian election has inspired Kyiv to go after the Moscow-backed insurgents, some of who appear to be Russian citizens, with renewed vigor.  The Russian government is still blustering about a civil war, but for now seems reluctant to openly intervene in eastern Ukraine. In general, the Ukrainian situation seems to be quieting down.
In Libya, the situation is going from bad to worse. We now have two prime ministers, and the militias have closed down what little oil exporting was taking place. There is so much violence going, including an attack on one of the prime minister’s house that the US embassy has warned all Americans in the country to get out. Western oil companies are pulling out expatriates. Prospects for significant oil exports from Libya in the immediate future are not good.
In Egypt the election to confirm Marshal Sisi as a democratically elected President is facing extremely low turnouts due to widespread boycotts of the voting. It is going to be a long summer in Cairo.