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 avoid seeing earnings impacted by the low prices of oil. He also suggested that oil prices lately have been driven by market sentiment and not fundamentals.

Shell’s good fortunes are not being repeated in the shale front. Yesterday, Hess Oil (HES) said it would be cutting spending and exploratory expenditures forecast to $2.15B from the original guidance of $2.25B after posting a bigger than expected loss. This comes after the CEO at Halliburton said that rig count growth is showing signs of plateauing and customers are tapping the brakes. Hess sold assets in the Permian basin but is still trying to entice investors with the promise of more oil. The Hess cut was lower than Anadarko’s $300 million capex cut due to losses in shale oil production. Sanchez Energy (SN) also announced $75 million to $100 million in 2018 spending cuts as shale oil is not yielding them a profitable price.