Go to the link below to read the highlights.
https://www.iea.org/oilmarketreport/omrpublic/
IEA's "Oil Market Report" as of Dec 14
IEA's "Oil Market Report" as of Dec 14
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: IEA's "Oil Market Report" as of Dec 14
From the IEA's report: "OECD commercial stocks fell 40.3 mb in October to 2 940 mb, their lowest level since July 2015. They are now 111 mb above the five-year average. Chinese crude stocks likely fell in October for the first time in a year. Preliminary global stocks data for November shows a mixed picture."
In the body of the report the IEA states that supply and demand for oil are very close, so how can OECD inventories be falling by over a million barrels per day?
I think two things are clear:
1. Demand for oil is much higher than they estimate. < IEA has a long history of under-estimating global demand (see slide 8 of my last podcast)
2. They are basing U.S. oil production growth on EIA's weekly estimates, which IMO are overstated. < Yes, we are going to see a seasonal surge in production but growth should slow after Q1 2018 just as it did last year. The surge comes from DUC completions in Q4 to get those wells into year-end reserve reports.
In the body of the report the IEA states that supply and demand for oil are very close, so how can OECD inventories be falling by over a million barrels per day?
I think two things are clear:
1. Demand for oil is much higher than they estimate. < IEA has a long history of under-estimating global demand (see slide 8 of my last podcast)
2. They are basing U.S. oil production growth on EIA's weekly estimates, which IMO are overstated. < Yes, we are going to see a seasonal surge in production but growth should slow after Q1 2018 just as it did last year. The surge comes from DUC completions in Q4 to get those wells into year-end reserve reports.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group