The crude oil price today (Monday) fell nearly 2% to $47.87 in early morning trading before rising again. With today's dip, oil prices have now fallen 10% since the beginning of March.
However, it's not time to panic yet, and we'll show you why...
The drop in the oil price today shows traders are pessimistic about rising U.S. oil production. They believe it could offset OPEC's oil production cut agreement. The cartel's deal to cut 1.8 million barrels of oil production a day sent oil prices soaring 20% higher, from $45.29 a barrel before the Nov. 30 agreement to a 2017 high of $54.48 a barrel on Feb. 23.
But as the price of oil rose, more oil started flowing out of Americans rigs.
Last week, the EIA reported U.S. crude oil production had climbed for the fourth straight week. U.S. oil production has grown 4% since the start of the year. And on Friday, Baker Hughes Inc. (NYSE: BHI) reported the U.S. oil rig count grew to 789 rigs. That's up 21 rigs from last week and up 313 since this time last year.
But traders are overreacting to the oil price news about U.S. production data. U.S. oil producers have only added 339,000 barrels of oil a day, while OPEC and 11 other countries have cut over 1.2 million barrels of oil a day. That means oil will still be a strong investment in 2017...
Don't Worry About the Falling Crude Oil Price Today
The price of oil dipped below $50 a barrel for the first time this year on March 8. But Money Morning Global Energy Strategist Dr. Kent Moors predicts oil prices are heading even higher in 2017, just as long as OPEC keeps its agreement in place.
Trending Now: Our Bold Oil Price Prediction for 2017
And all signs point to the OPEC deal working...