IEA Oil Market Report

[dan_s]

Go to https://www.iea.org/oilmarketreport/omrpublic/ to read the summary.

It sounds bearish, but take a few minutes to study the demand chart on page one. It says it is a chart of oil demand, but it is really a chart of demand for refined products.

Note that demand is expected to jump by over 1.3 million barrels per day from Q2 to Q3. Also, note that this annual spike in demand happens each year. This is why analysts like Raymond James, TPH and even Goldman Sachs now see a much tighter oil market in six months.

In past cycles, IEA has grossly underestimated the impact of low fuel prices on demand. They did it in 2015 and I think they are doing it again in 2016.

On the supply side, I believe we will see Non-OPEC production decline at a faster rate than many are expecting. OPEC just doubled their estimate of how much it will fall. Beyond 2016, we will definitely be in an undersupplied oil market.

[dan_s]

Goldman Sachs new forecast for oil prices: http://www.barrons.com/articles/goldman ... 1453223508