IEA Oil Market Report (Still Bullish for Oil) - May 16

[dan_s]

From OilPrice.com

The unexpected launch of US SPR repurchases combined with the IEA reiterating its belief in strong demand growth into the second half of 2023 have buoyed oil prices, lifting ICE Brent to $75 per barrel. The strong messaging will likely meet resistance from weak manufacturing data reported by China, but it seems the downside is limited for crude ahead of the upcoming OPEC+ meeting.

US to Start Refilling SPR. In a surprise move, the US Department of Energy said it will purchase 3 million barrels of oil for the Strategic Petroleum Reserve for August delivery, specifying that the crude should be sour and going to the Big Hill, TX site.

IEA Turns Suddenly Bullish. Acknowledging that oil has been pressured by weak industrial activity growth and higher interest rates, the IEA nevertheless warns that it expects a 2 million b/d discrepancy between global oil demand and supply, raising its demand growth forecast to 102 million b/d. < 104 million b/d of demand in Q4 and I don't think OPEC has enough supply capacity to meet that level of demand.

MY TAKE: All we need is less fear of a recession and oil prices will move firmly over $80/bbl this summer.

[moke]

The Democrats will not refill the SPR. They may put a tiny amount back in but that will be it.

The odds are about the same as finding a Coup de Ville in the bottom of a cracker jack box.

[dan_s]

I give it about a 10% chance just to claim that Old Joe is a moderate. It will have no impact on the price of WTI.