There was continued bullish data in the news yesterday with the EIA revealing a 5.9 million barrel decline in U.S. crude inventories from last Friday to tomorrow. That draw can be attributed to plummeting stocks in the Gulf Coast, which fell nearly 8 million barrels last week. Keep in mind that there were builds in Cushing, OK, with crude inventories increasing 2 million barrels to 62.1 million, which is about 100,000 barrels away from the all-time high. Even with that build, the overall data still revealed a draw.
Since we are approaching the end of the year, sharing information on outlooks for the New Year is crucial. PVM Oil Associates released its final 2015 commentary on oil market fundamentals, "A catastrophe is looming and something will have to give," regarding oil prices and supply heading into 2016. PVM believes that excess oil supply will continue to dominate market news next year, thanks to the possibility that OPEC oil production could rise above 32 million-b/d. Iraq also expects that its oil exports will hit a new record this month, and there is also the prospect that Iran will have sanctions removed by the end of January. If sanctions are removed, it would add another 500,000-b/d to 1 million-b/d of supplies to the marketplace.
- OPEC forecasted oil being at $70/bbl by the year 2020, and forecasted the demand for OPEC oil to decline through 2020.
- PVM reported there will be a huge crude oil surplus again next year, at a level that will be on pace with this year. Saudi Arabia deciding to cut production or a large supply disruption could cause a change to the surplus outlook.
We at Guttman Energy appreciate your business and hope all of you have a Merry Christmas and a happy holiday. Stay safe, stay warm (even though it won’t be a white Christmas in most cities) and enjoy the time with your families!