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FGE's oil market update Jan 2015

Oil
 

It is difficult to emphasize just how bearish the supply/demand outlook is currently. As things stand, we are looking at an unprecedented stockbuild during Q1 2015. For as long as OPEC, or essentially rather Saudi Arabia, persists with the current policy of sustaining output at current levels, there is a potential oversupply of up to 2.0 mmb/d. In the next few months, we do not think that non-OPEC supplies (ie US shale primarily) nor oil demand will respond sufficiently to restore market balance…..More importantly, the stocks position in Q1 2015 will be closely tracking the very high stock-levels seen in 2008-09 (when crude prices dropped to only $40/bbl, it is worth noting).

The question now is how low prices have to fall to bring the system into balance. We think there is a possibility now of crude prices heading towards $40/bbl in early 2015.

Summary of FGE World Oil Market Report 11th December 2014, available to FGE Short-Term Global Oil retainer Clients. If you are interested in obtaining further information on our retainer services, please contact FGE's Marketing (details below).

 

Further information on FGE's Short-Term Global Oil Service can be found online by clicking on the link below.

 

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