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IEA says progressing vaccinations should unlock pent-up demand for oil in Q4

  
Analysis, Crude

IEA remarks in its monthly report

  • Vaccine rollouts should help to unlock stymied demand for oil, especially in Asia
  • Signs that COVID-19 cases are abating should see demand rebound sharply by 1.6 mil bpd in October and continuing to growth until year-end
  • Unplanned outages from Hurricane Ida offset increases by OPEC+
  • Estimates that global oil demand fell for three straight months to date amid the COVID-19 resurgence in Asia
  • Adds that the market should shift closer to balance from October if OPEC+ continues to unwind output cuts
  • By early 2022, supply will be high enough to allow oil stocks to be replenished

A good summary on the oil market situation right now as delta variant concerns are still persisting but less impactful as what we saw over the past few months. Adding to that is the hype surrounding fossil fuels amid a cold winter and higher energy prices.

Oil is up 0.8% today and testing the $71 mark as buyers look to build on a daily break above $70 in trading yesterday.

Oil – US Gulf copping it again, this time Tropical Storm Nicholas

  
Analysis, Crude

The US oil industry is still struggling to recover from the damage from Hurricane Ida.

Circa 40% of capacity is still compromised.
Now a new storm is slowing efforts at recovery, at least this one does appear to be as intense as Ida. Tropical Storm Nicholas may gather intensity though, the US National Hurrican Center say:
  • A Hurricane Watch is in effect for…* Port Aransas to San Luis Pass Texas
The US oil industry is still struggling to recover from the damage from Hurricane Ida. 

OPEC forecasts global oil demand will exceed pre-pandemic levels in 2022

  
Analysis, Crude

OPEC monthly report is out

OPEC
  • Sees world oil demand next year rising 4.15 Million Bpd  versus 3.28Mln in prior monthly report but 4.2 mbpd at Sept OPEC+ meeting.
  • Sees demand at 100.8 mbpd next year, exceeding pre-pandemic levels
  • August oil output rose 150k bpd (less than the 400k bpd increase in quotas)
  • Keeps 2021 full year demand growth virtually unchanged at 5.96 mbpd
  • 2021 non-OPEC supply lowered by 170 kbpd due largely to outages in gulf of Mexico
  • Says oil demand in 3Q21 has proved to be resilient
  • Global economic growth forecasts for both 2021 and 2022 remain unchanged from the last month’s assessment at 5.6% and 4.2% respectively
  • OECD oil stocks were 57 million barrels below the five-year avg

(more…)

US EIA oil forecasts sees lower US supply this year

  
Analysis, Crude

The latest forecasts from the EIA

  • Sees 2021 US output falling to by 200K bpd this year vs -160K bpd in prior forecast (to 11.08 mbpd)
  • Sees 2022 output rising 640K vs 650K bpd prior
  • Sees 2021 demand up 1.55 mbpd vs 1.58 mbpd prior
  • Sees 2022 demand rising 890K bpd vs prior forecast of 860K bpd prior
These are minor changes and forecasting oil supply and demand is very difficult (as the EIA’s record proves), especially coming out of a pandemic. I focus on the direction of changes and overall the signal is that supply is disappointing.

US EIA cuts forecast for 2021 world oil demand growth by 370K bpd

  
Analysis, Crude

EIA out with demand and supply forecasts

  • US EIA cuts forecast for 2021 world oil demand growth by 370K bpd. Now sees 4.96M bpd YoY increase
  • Raises forecast for 2022 world oil demand growth by 10K bpd.  Now sees 3.6 million bpd YoY increase
  • Leaves 2021 world oil demand growth unchanged at 5.33M bpd YoY increase
  • Leaves 2022 world oil demand growth unchanged at 3.62M bpd year on year increase
In the US:
  • US crude output to fall 200K bpd to 11.08M bpd in 2021 (vs fall of 160K bpd forecast last month)
  • US petroleum demand to rise 890K bpd to 20.63 million BPD in 2022 (vs rise of 860K bpd previously forecast)
  • US petroleum demand to rise 1.55M bpd to 15.74M bpd in 2021 (vs rise of 1.58M bpd previously forecast)
  • US crude output to rise 640K bpd to 1.72M bpd in 2022 (versus rise of 650K bpd forecast last month)
The price of WTI crude oil futures are trading up around $0.95 or 1.36% at $69.30.

OPEC agrees to plan on gradual output hikes – report

  
Analysis, Crude

Report, citing a delegate

No surprise.
There was a broad consensus that OPEC+ would stick to the plan to hike output by 400k bpd in October.
WTI crude is struggling today, down $1 to $67.54. Meanwhile, natural gas is absolutely sizzling, up 5.7% and at all time highs in Europe.
There’s a big inflation shock coming on the natty side this winter.
Here’s a look at the daily oil chart, which looks like it’s stumbled at the Aug 12 highs and will need to hold $66.93 or risk a deeper correction.
oil

OPEC+ said to be set to stick with latest output policy at its meeting today

  
Analysis, Crude

A tweet by energy market journalist, Reza Zandi

An informed source has intimated that considering the outcome of the JTC meeting yesterday, it appears that the #OPEC plus meeting today will continue its previous policy; i.e., roll-over of the same increase of 400 thousand barrels per day
That is to be expected given the latest circumstances and reports that we have seen emerging since the weekend. That said, don’t discount any surprises going into the meeting later today. I mean, it is OPEC+ after all.

OPEC+ meets on Wednesday 31 August 2021 – preview

  
Analysis, Crude

For the oil traders, eyes on the cartel meeting (and its friends) in Vienna on Wednesday.

Reuters cite their sources:
  • “Current oil prices around $70 are okay. OPEC+ is likely to continue as planned with the increase of 400,000 bpd,” said one source.
While from ANZ:
  • the OPEC+ alliance is set to review the current production cut agreement. With rising coronavirus case number globally, the market will be on the lookout for any sign the group may be considering halting the scheduled increase in production in coming months.
For the oil traders, eyes on the cartel meeting (and its friends) in Vienna on Wednesday.
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