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IEA says that global oil supplies will increase far more than demand next year

  
Analysis, Crude

IEA comments in its latest monthly report on the oil market

IEA
  • World oil demand to accelerate to 1.4 mil bpd in 2020
  • But will be offset by production surge to 2.3 mil bpd at the same time
  • Notes that ongoing US shale boom as main reason
  • Says that despite OPEC efforts, they are still pumping much more oil than required
In short, global supply will still outpace global demand in the coming year and if OPEC wants to avoid prices from falling further then they have to step up their production cut quotas – which I don’t see happening.
Either way, that’s good news for consumers in general as this outlook would mean lower oil prices so that should alleviate some burden amid the global trade slowdown.

Iran on oil tanker attacks: Suspicious doesn’t begin to describe what likely transpired this morning

  
Analysis, Crude

Iran’s foreign minister, Javad Zarif, tweets

Reported attacks on Japan-related tankers occurred while PM @AbeShinzo was meeting with Ayatollah @khamenei_ir for extensive and friendly talks.

Suspicious doesn’t begin to describe what likely transpired this morning.

Iran’s proposed Regional Dialogue Forum is imperative.

Despite the statement above, I reckon the US will no doubt start pointing the finger back to Iran in no time again much like before. Oil prices are still elevated on the day following the attacks earlier with Brent up by 3.5% to $62.05 currently.

Oil tanker which caught fire in the Gulf of Oman reportedly said to be struck by a torpedo

  
Analysis, Crude

According to a report by TradeWinds, citing industry sources

It is also being reported that two tankers were caught in the crossfire, not just one, and the crew were forced to evacuate them because of the incident. The headline will only serve to prove that Middle East tensions are still very much present and will continue to act as a tailwind for oil prices as we have seen earlier in the year.

Oil is still holding to the majority of its gains so far with both Brent and WTI up by more than 2.5% on the day. The latter is currently trading at $52.50.

Crude oil hangs nearer low levels for the day

  
Analysis, Crude

Build in inventory may not have been as much as the private data, but rally higher is limited

The price of crude oill remains closer to the lows after the inventory data showed a build of 2206K (last week 6771K build and est of -1000K). The build was less than the private data at the end of trading yesterday (+4852K) but the rally off the low has been limited.
Build in inventory may not have been as much as the private data, but rally higher is limited
The current price is at $51.92. That is down -$1.35 of -2.59%. The low for the day reached $51.46. The high extended to $53.05, but that was at the start of the trading day.  At the start of the day, the price was breaking below the 100 hour MA (blue line) currently at $53.20.  For nearly 3 days, the contract traded between the 100 and 200 hour MAs.  Falling below was more bearish.
On more weakness, the swing lows from June 6th and 5th will be targeted at $51.17 and $50.60 respectively.

Oil: UAE Energy Minister says OPEC close to reaching agreement on extending production cuts

  
Analysis, Crude

United Arab Emirates Oil Minister Al-Mazroui

  • OPEC members close to reaching agreement on extending production cuts
  • Says current oil inventories suggest curbs should remain in place
  • OPEC’s production deal should remain or be extended ‘at least until the end of the year’

OPEC meeting coming up on  June 25 and 26. Some what to expects:

  • Goldman Sachs on oil, OPEC, Russia, Saudi. Hard road ahead for extension of output pact
  • Russia’s Siluanov: If OPEC+ doesn’t reach an agreement, oil price may fall to $40

An Update :US Dollar Index ,Euro ,INR ,YEN ,GBP ,CAD ,AUD ,Mexican Peso ,GOLD ,SILVER ,SPX 500 -Anirudh Sethi

  
Analysis, Crude, Forex, US Market
The US dollar fell against all the major currencies last week, and the technical indicators warn the further losses are likely.  Market speculation that the Federal Reserve will be forced to cut rates more than once this year has strengthened.  It is outpacing the expectations that the ECB and BOJ will have to ease policy as well.  Canada’s firmer data, including a surge in job creation, and Norway’s shift to a less accommodative monetary stance, are notable exceptions.  The Bank of England may be as well, but the uncertainty about Brexit and the risk of a no-deal exit at the end of October suggest steady policy may continue to be appropriate.
President Trump hinted that the new tariffs on Mexico would not be implemented while the markets were open before the weekend.  The peso rallied on the news, and the deal that led to the “indefinite suspension” of the tariff was confirmed.  To be sure, the “suspension” means the tariffs and the claim of emergency powers remains on the books, and that the proverbial Sword of Damocles continues to be an implicit threat whose suspension can be lifted at the will or whim of the US President.
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Goldman Sachs on oil – lower prices sooner

  
Analysis, Crude

Quick piece from GS on oil markets, in brief (the post headline is the real in brief):

GS cite:
  • escalating trade wars 
  • weaker activity indicators
Which have ‘fast-forwarded’ price falls the bank had projected for Q3 (65.50/bbl)
GS forecast:
  • prices to likely remain around our 3Q forecasts and current levels
  • still high price volatility
  • global economic outlook in increasingly uncertain
On supply:
  • rising US production
  • large core-OPEC spare capacity

US crude oil inventories -282K vs -1360K estimate

  
Analysis, Crude

Weekly US crude oil inventories from the DOE

  • Crude oil inventories -282K vs -1360K estimate
  • Gasoline inventories 2204K vs -800K estimate
  • Distillates inventories  -1615K versus 750K estimate
  • Cushing OK crude inventories -16K vs 1266K last week
  • US refinery utilization 1.30% versus 1.00% estimate
  • crude oil implied demand 19202 versus 18466 last week
  • gasoline implied demand 10110.4 versus 9845.4 last week
  • distillates implied demand 5589.7 versus 5098.3 last week
Crude oil traded at $58.75 before the report.
The price is currently trading at $58.35.
The private data last night showed a surprise draw of 5265K in crude oil (see chart below). The less than expected draw (vs that data and estimate of -1360K) has helped to push the price lower.
crude oil inventories from the private API data
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