• 3 minutes Could EVs Become Cheaper than ICE Cars by 2023?
  • 6 minutes Your idea of oil/gas prices next ten years
  • 12 minutes WTI Heading for $60
  • 3 hours Is California becoming a National Security Risk to the U.S.?
  • 10 hours At U.N. climate talks, US Administration Plans Sideshow On Coal
  • 11 hours Plastic Myth-Busters
  • 5 hours A Sane Take on Nord Stream 2
  • 12 hours Good Sign for US Farmers: Soybean Prices Signals US-China Trade Deal Progress
  • 6 hours I Believe I Can Fly: Proposed U.S. Space Force Budget Could Be Less Than $5 Billion
  • 19 hours Soybean sale to China down 94%
  • 18 hours what's up with NG?
  • 11 hours UK Power and loss of power stations
  • 10 hours OPEC Builds Case For Oil Supply Cut
  • 2 days Starbucks slashing its corporate workforce
  • 2 days New Oil Order- Diplomacy, Geopolitics and Economics
  • 2 days Pros and Cons of Coal

What Is Keeping Oil From Entering A Bear Market?

Rig

October has been a tough month for crude oil. WTI has dropped from $76 to $66 while Brent fell from $86 to $76. We started the month thinking that prices would exist in a tug of war between bullish supply/demand fundamentals and a bearish economic background and instead the market’s been served a relentless flow of bearish news for three straight weeks.

For supply/demand balances, the news flow has been focused on downgrades to 2019 demand forecasts and higher than expected supply gains in the United States. OPEC, the EIA and IEA all downgraded their expected refiner consumption for 2019 and China/U.S. trade disputes have added to concerns from analysts that the economic picture isn’t pretty. In the U.S., crude oil stocks have jumped by an incredible 29m bbls over the past five weeks. To put that in a seasonal context, inventories decreased by 6m bbls during the same period in 2016 and fell by 15m bbls during the same period in 2017. Much of the recent builds have been due to seasonal refiner maintenance but the more powerful force in the market for now seems to be that every key producer globally – with the exception of Iran and Venezuela – is pumping at record levels.

On the macro side we’ve been arguing for several months that a dimming growth outlook for 2019 would help keep a lid on prices. These concerns have been highlighted in October by falling global equity markets from Shanghai to New York which have been a primary driver…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin

Trending Discussions




Oilprice - The No. 1 Source for Oil & Energy News