LONG USOIL: OPEC MONTHLY REPORT: BREXIT, DEMAND > SUPPLY IN 2017
- IMO key take aways from the report was the highlighting of brexit as a downside risk and readjusting global growth as a result - despite the UK being only 4% of world GDP.
Nonetheless OPEC went on to stress that oil supply side is likely to abate over the next year with demand excess reducing supply stocks - this is likely going to see an increased price in oil over the medium term.
Non- OPEC supply is expected to fall both in 2016 and 2017, whilst demand they expect to stand still in 2017 at 1.2 million B/D growth - the same as 2016's forecast.
- Further, I expect upside in the near term based on risk-on money flows into oil are likely to take hold, as safe havens take a rest and risk assets rally (oil in the past 2 years can be considered relatively risky).
We also see the Oil futures market trading contango, with July 17 contracts trading significantly above spot at 51.45.
OPEC's analysis in mind, the contango futures structure and the near-term risk-on markets ($ weakness) oil is a buy with a $49 target for WTI in the near term.
OPEC REPORT HIGHLIGHTS:
OPEC: Brexit Poses Downside Risk for European Oil Demand
OPEC Downgrades World Economic Growth Because of Brexit
OPEC: Eurozone Economic Growth to Fall to 1.2% in 2017
OPEC's June Crude Production Up 264,000 B/D to 32.86M B/D
OPEC Keeps World Oil Demand Growth Unchanged at 1.2 million B/D This Year
OPEC Sees World Oil Demand Growth at 1.2 Million B/D for 2017
OPEC Revises Non-OPEC Oil Supply Down by 140,000 B/D in 2016
OPEC: Non-OPEC Supply Will Fall by 900,000 Barrels a Day in 2016
OPEC: Non-OPEC Supply to Decline by 110,000 B/D in 2017 to average 55.92M B/D
OPEC: Brazil, Canada are Main Drivers of 2017 Production Growth
OPEC Cites Brexit Risk to Global Oil Demand and Economy
OPEC: OECD Commercial Oil Stocks Fell in May to Stand at 3,063M B/D
OPEC: Demand for Its Crude To Average 31.9M B/D in 2016
OPEC Expects Demand for its Crude in 2017 to Stand at 33M B/D, 1.1M B/D Higher Than This Year
OPEC: Market Conditions Will Help Remove Overall Excess Oil Stocks in 2017
Nonetheless OPEC went on to stress that oil supply side is likely to abate over the next year with demand excess reducing supply stocks - this is likely going to see an increased price in oil over the medium term.
Non- OPEC supply is expected to fall both in 2016 and 2017, whilst demand they expect to stand still in 2017 at 1.2 million B/D growth - the same as 2016's forecast.
- Further, I expect upside in the near term based on risk-on money flows into oil are likely to take hold, as safe havens take a rest and risk assets rally (oil in the past 2 years can be considered relatively risky).
We also see the Oil futures market trading contango, with July 17 contracts trading significantly above spot at 51.45.
OPEC's analysis in mind, the contango futures structure and the near-term risk-on markets ($ weakness) oil is a buy with a $49 target for WTI in the near term.
OPEC REPORT HIGHLIGHTS:
OPEC: Brexit Poses Downside Risk for European Oil Demand
OPEC Downgrades World Economic Growth Because of Brexit
OPEC: Eurozone Economic Growth to Fall to 1.2% in 2017
OPEC's June Crude Production Up 264,000 B/D to 32.86M B/D
OPEC Keeps World Oil Demand Growth Unchanged at 1.2 million B/D This Year
OPEC Sees World Oil Demand Growth at 1.2 Million B/D for 2017
OPEC Revises Non-OPEC Oil Supply Down by 140,000 B/D in 2016
OPEC: Non-OPEC Supply Will Fall by 900,000 Barrels a Day in 2016
OPEC: Non-OPEC Supply to Decline by 110,000 B/D in 2017 to average 55.92M B/D
OPEC: Brazil, Canada are Main Drivers of 2017 Production Growth
OPEC Cites Brexit Risk to Global Oil Demand and Economy
OPEC: OECD Commercial Oil Stocks Fell in May to Stand at 3,063M B/D
OPEC: Demand for Its Crude To Average 31.9M B/D in 2016
OPEC Expects Demand for its Crude in 2017 to Stand at 33M B/D, 1.1M B/D Higher Than This Year
OPEC: Market Conditions Will Help Remove Overall Excess Oil Stocks in 2017
API Reports US Crude Stocks +2.2 Mln Bbl in Week, Source Says 2016.07.12 23:38:00
API Reports US Gasoline Stocks +1.5 Mln Bbl in Week, Source Says 2016.07.12 23:40:00