Quarterly Oil Market Update: All eyes on OPEC and the US
Oil Market ReportCurrently, Brent oil is trading at around $55 per barrel, with little deviation from this level in the last two months. This stability in prices is mainly due to coordinated action by OPEC and some non-OPEC members, with January crude oil production data showing OPECs oil output was down, month-on-month, by 900 thousand barrels per day. Despite the relatively stable start to the year, oil price volatility is likely to re-emerge during 2017 as global oil markets face up to a rising risk of OPEC noncompliance to production cuts, upward revisions in US oil production, and policy initiatives from the new US administration.
Quarterly Oil Market Update: (Volatility Returns to Oil Markets)
Oil Market ReportOil prices rose 10 percent quarter-on-quarter in Q1 2017, but volatility levels were up too, especially towards the end of the quarter. Although both OPEC and non-OPEC cuts are contributing to a reduction in global oil balances, global commercial oil inventories nevertheless remain high. Demand is expected to pick up in H2 2017.
Quarterly Oil Market Update (Q1-2016): Production "freezes" not a big deal
Oil Market ReportLower yearly oil prices are taking their toll on shale oil producers, with Q1 2016 seeing the first year-on-year fall in US production in eight years, but record rises in OPEC and Russian crude production have more than compensated for this drop. Oil prices have shown some firmness in the run-up to the production ‘freeze meeting between a number of oil producing countries next week. In our view, there are significant risks to either an agreement being reached or a lack of implementation even if there is an agreement. In both instances we would expect the gains of the previous month or so to be lost. As such we maintain our full year 2016 Brent forecast at $33 pb with prices increasing to $44 pb in 2017.
