USOIL UKOIL: IEA MONTHLY OIL REPORT - BREXIT; DEMAND > SUPPLY 17
The IEA Oil Market Report was largely in line with OPEC's assesment yesterday - Non OPEC output was seen falling in 2016 by 900,000 B/D - However, they differed on the 2017 perspective with 2017 expectations from the IEA forecasting a modest growth of 200,000 B/D in 2017. Opec Output however rose to an eight year high up 400,000 B/D in June at 3.21M B/D on the back of Saudia and Nigerian growth.
On the margin the IEA actually came out on the margin relatively bearish for the oil market and its future - citing a global oil supply increase at +600,000 B/D to 96m in June - with Non OPEC seen at 55.9m B/D.
Nonetheless, the IEA went out of their way to highlight that the oil market had made an extraordinary recovery from "Market Surplus" to "near balance" in Q2 2016. The IEA Uped the World Oil Demand Growth Forecast to 1.4M B/D in 2016 (up +0.1M B/D), whilst seeing World Oil Demand Growing by 1.3M B/D in 2017. On the margin it is unsure what the net forces are for 2016 and 2017's demand-supply balance will be, though a 1.4m B/D in 2016 increase in global oil demand growth outstrips the Non-opec 200,000 B/D increase in supply foretasted - this is medium term bullish for Oil. They remained on the fence with Brexit concerns which imo is a positive positioning for the oil market given there should be a negative bias
Other notable statements were "There is still an ominous investment gap building up in the oil industry that might, depending on how quickly today's record high oil stocks are eroded, create the conditions for sharply higher prices over the medium term." and "Our underlying message that the market is heading to balance remains on track, but the modest fall back in oil prices in recent days to closer to 445/BBL is a reminder that the road ahead is far from smooth." - these comments in mind, traders should use this information to understand that volatility is likely to be higher so TP/SL should be adjusted accordingly to reduce the margin of error. Personally, i think further USD strength may continue to dull the oil market.
IEA Monthly Oil Report Analysis:
-IEA: Global Oil Supply Rose 600,000 B/D to 96M B/D in June
-IEA: Non-OPEC Output Seen Falling by 900,000 B/D in 2016
-IEA: Non-OPEC Output Will See Modest Growth of 200,000 B/D in 2017
-IEA: Non-OPEC Output Rose in June by 205,000 B/D to 55.9M B/D on Partial Recovery in Canada
-IEA: OPEC June Output Up 400,000 B/D to Eight-Year High of 33.21M B/D on Rise in Saudi, Nigeria
-IEA: Says Saudi Arabia Ramped Up Output to Near-Record Rate of 10.45M B/D in June
-IEA: Says Iranian Output Rose to 3.66M B/D in June, up 50,000 B/D From May
-IEA: Says OECD Commercial Stocks Stood at Record 3,074 Million Barrels by End-May
-IEA: Market Showing Extraordinary Transformation From Major Surplus to Near Balance in 2Q
-IEA: Says High Oil stocks Are Threat to Recent Stability of Prices
-IEA: Ups World Oil Demand Growth Forecast to 1.4M B/D in 2016
-IEA: Sees World Oil Demand Growing by 1.3M B/D in 2017
-IEA: Says Middle East Oil Output Rose to Record High of 31.5M B/D in June
-IEA: Says Hard to Draw Conclusions About Brexit
-IEA: Says High Oil Stocks Pose Threat to Price Stability
iea.org/oilmarketreport/omrpublic/
On the margin the IEA actually came out on the margin relatively bearish for the oil market and its future - citing a global oil supply increase at +600,000 B/D to 96m in June - with Non OPEC seen at 55.9m B/D.
Nonetheless, the IEA went out of their way to highlight that the oil market had made an extraordinary recovery from "Market Surplus" to "near balance" in Q2 2016. The IEA Uped the World Oil Demand Growth Forecast to 1.4M B/D in 2016 (up +0.1M B/D), whilst seeing World Oil Demand Growing by 1.3M B/D in 2017. On the margin it is unsure what the net forces are for 2016 and 2017's demand-supply balance will be, though a 1.4m B/D in 2016 increase in global oil demand growth outstrips the Non-opec 200,000 B/D increase in supply foretasted - this is medium term bullish for Oil. They remained on the fence with Brexit concerns which imo is a positive positioning for the oil market given there should be a negative bias
Other notable statements were "There is still an ominous investment gap building up in the oil industry that might, depending on how quickly today's record high oil stocks are eroded, create the conditions for sharply higher prices over the medium term." and "Our underlying message that the market is heading to balance remains on track, but the modest fall back in oil prices in recent days to closer to 445/BBL is a reminder that the road ahead is far from smooth." - these comments in mind, traders should use this information to understand that volatility is likely to be higher so TP/SL should be adjusted accordingly to reduce the margin of error. Personally, i think further USD strength may continue to dull the oil market.
IEA Monthly Oil Report Analysis:
-IEA: Global Oil Supply Rose 600,000 B/D to 96M B/D in June
-IEA: Non-OPEC Output Seen Falling by 900,000 B/D in 2016
-IEA: Non-OPEC Output Will See Modest Growth of 200,000 B/D in 2017
-IEA: Non-OPEC Output Rose in June by 205,000 B/D to 55.9M B/D on Partial Recovery in Canada
-IEA: OPEC June Output Up 400,000 B/D to Eight-Year High of 33.21M B/D on Rise in Saudi, Nigeria
-IEA: Says Saudi Arabia Ramped Up Output to Near-Record Rate of 10.45M B/D in June
-IEA: Says Iranian Output Rose to 3.66M B/D in June, up 50,000 B/D From May
-IEA: Says OECD Commercial Stocks Stood at Record 3,074 Million Barrels by End-May
-IEA: Market Showing Extraordinary Transformation From Major Surplus to Near Balance in 2Q
-IEA: Says High Oil stocks Are Threat to Recent Stability of Prices
-IEA: Ups World Oil Demand Growth Forecast to 1.4M B/D in 2016
-IEA: Sees World Oil Demand Growing by 1.3M B/D in 2017
-IEA: Says Middle East Oil Output Rose to Record High of 31.5M B/D in June
-IEA: Says Hard to Draw Conclusions About Brexit
-IEA: Says High Oil Stocks Pose Threat to Price Stability
iea.org/oilmarketreport/omrpublic/
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