IEA: August 10th "Oil Market Report"

[dan_s]

Each month the IEA publishes an "Oil Market Report".

You should all read the summary carefully: https://www.iea.org/oilmarketreport/omrpublic/

"The recent cooling down of the market, with short term supply tensions easing, currently lower prices, and lower demand growth might not last. When we publish our next report in mid-September, we will be only six weeks away from the US's deadline for Iran's customers to cease oil purchases. As oil sanctions against Iran take effect, perhaps in combination with production problems elsewhere, maintaining global supply might be very challenging and would come at the expense of maintaining an adequate spare capacity cushion. Thus, the market outlook could be far less calm at that point than it is today." - IEA August 10, 2018

From TPH Morning Report 8/10/2018:

Market holding their breath for an eventful H2'18.

"June OECD inventories reportedly drew 7mmbbls, in-line with 5-yr norms (8mmbbl draws), and implies that the market was ~balanced vs norms. Market deceptively calm as the 2nd wave of US Iranian sanctions and a potential (further) escalation of the US-China trade war likely dramatically shifts the global balance in the coming months. Intrigue remains on the supply side of the equation after Saudi reduced production ~110mbpd m/m (initial commentary suggested a further ramp) with the IEA implying lack of demand as the impetus. Production in Venezuela fell ~40mbpd m/m to 1.26mmbpd (down 770mbpd y/y) while Libyan production remains depressed at 0.67mmbpd (supply disruptions). The IEA reduced outlook on Brazil (down 35mbpd -- 2018 and down 75mbpd -- 2019) citing declines & prolonged maintenance, but is maintaining a bullish development cadence, seeing 4 new FPSO on-line by YE though YTD has continued to disappoint and push growth to the right."