• 1 hour Weatherford Looks To Sell Assets To Ease Some Of $8B Debt
  • 2 hours OPEC Set To Move Fast On Cut Extension Decision
  • 4 hours Nigeria Makes First Step Away From Oil
  • 16 hours Russia Approves Profit-Based Oil Tax For 2019
  • 20 hours French Strike Disrupts Exxon And Total’s Oil Product Shipments
  • 22 hours Kurdistan’s Oil Exports Still Below Pre-Conflict Levels
  • 1 day Oil Production Cuts Taking A Toll On Russia’s Economy
  • 1 day Aramco In Talks With Chinese Petrochemical Producers
  • 1 day Federal Judge Grants Go-Ahead On Keystone XL Lawsuit
  • 1 day Maduro Names Chavez’ Cousin As Citgo Boss
  • 1 day Bidding Action Heats Up In UK’s Continental Shelf
  • 2 days Keystone Pipeline Restart Still Unknown
  • 2 days UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 2 days Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 2 days Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 2 days German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 2 days Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 2 days Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 3 days Oil Prices Rise After API Reports Major Crude Draw
  • 3 days Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 3 days Gazprom Speaks Out Against OPEC Production Cut Extension
  • 3 days Statoil Looks To Lighter Oil To Boost Profitability
  • 3 days Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 3 days Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 3 days Whitefish Energy Suspends Work In Puerto Rico
  • 3 days U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 4 days Thanksgiving Gas Prices At 3-Year High
  • 4 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 4 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 4 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 4 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 4 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 4 days ConocoPhillips Sets Price Ceiling For New Projects
  • 7 days Shell Oil Trading Head Steps Down After 29 Years
  • 7 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 7 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 7 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 7 days Venezuela Officially In Default
  • 7 days Iran Prepares To Export LNG To Boost Trade Relations
  • 7 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
Alt Text

WTI Prices Surge On Keystone Spill

The outage at the damaged…

Alt Text

Short Bets On Oil Spike Ahead Of OPEC Meeting

Short positions in Brent futures…

Alt Text

The IEA Is Grossly Overestimating Shale Growth

The IEA’s forecast that U.S.…

Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Oil Prices Slip On Bearish IEA Report

Permian drillers

It is national forget-me-not day, something it is impossible to do with OPEC amid an onslaught of monthly oil reports. Today's bearish-tilted monthly report from the IEA is combining with a stronger dollar to send crude lower, while an OPEC meeting looms in less than three weeks. Hark, here are six things to consider in oil markets today.

1) Today we have had the IEA's monthly Oil Market Report, which has highlighted something we have been pointing furiously towards recently: relentless global supply growth. The agency said OPEC had increased production by 230,000 barrels per day last month to a record 33.83mn bpd. Our ClipperData affirm a similar monthly trend for exports:

(Click to enlarge)

Looking ahead, the IEA says the oil market will maintain a supply surplus next year unless OPEC makes a production cut, given that non-OPEC production is expected to grow by 500,000 bpd next year.

While we will see some attrition from some countries, this will be more than offset by growth from Brazil, Russia and Kazakhstan (hark, Kashagan). Russia is set to account for 190,000 bpd of growth, Brazil some 280,000 bpd, Canada adds 225,000 bpd and Kazakhstan increases by 160,000 bpd.

(Click to enlarge)

2) The predicament facing OPEC is highlighted by the chart below from today's IEA report. The cartel has historically been the balancing item in the global market, but as a result of the U.S. shale boom, it has vacated this role, choosing instead to flood the market, battle for market share, and flush out higher cost production. This has resulted in OPEC production outpacing the volume needed to meet demand for the last ten consecutive quarters:



For market balance to be restored, this ship needs to right itself, for while non-OPEC production is set to resume its rise again next year, IEA projects demand growth will remain at +1.2mn bpd.

3) Yesterday's EIA report was fairly run-of-the-mill compared to recent weeks, although we saw lopsided gasoline inventory changes - in a similar fashion to those seen in the aftermath of the last Colonial pipeline outage back in September.

This time around, we saw East coast gasoline stocks drawn down by 5.4mn bbls, with a corresponding build on the Gulf coast of 3.7mn bbls (back in September, we saw the East coast drop by 8.5mn bbls, the Gulf Coast rise by 4.8mn bbls).

Related: Oil And Gas - Huge Victors Of The Presidential Election

After recouping much of September's drawdown, East coast gasoline stocks reached a record for the time of year two weeks ago, before being hit by the second closure of Line 1 of the 1.37mn bpd Colonial pipeline in less than two months:

(Click to enlarge)

4) This excellent chart below is from the Financial Times (by @Ed_Crooks), highlighting how independent U.S. producers are hedging significantly more of their production compared to last year, after a year of low oil prices has left them with considerably less tolerance for risk.

The total volume of short positions held by producers - a number indicative of producer hedging - hit a five-year high last month at 608mn bbls, as they choose price certainty over potential upside.

(Click to enlarge)

5) As the dust settles on the U.S. election, focus shifts towards what Donald Trump will prioritize...and what he will not. Prior to the election, he said he would cancel the Paris climate agreement, which was signed by 190 countries last December. Related: Breaking The Pattern: Trump Wins, Oil Jumps

The chart below highlights why the U.S. is integral to a global effort to cut emissions; is the second-largest emitter of greenhouse gases. Exiting the agreement is possible, but is likely to take a long time, and / or be a complex effort. A third option would be to simply ignore climate goals set under the agreement.

(Click to enlarge)

6) Finally, I intended to highlight this the other day, but recent shenanigans meant it got overlooked. China's import and export data for October was released this week, and continues to illustrate both sluggish domestic and global demand.

Exports dropped 7.3 percent YoY, worse than expected (lower year-on-year for 18 of the last 20 months), while imports also came in below par, down 1.4 percent (lower year-on-year for 23 of the last 24 months).

China's trade surplus has widened to $49 billion, driven by a $23.7 billion surplus with the U.S., and a $12.1 billion surplus with the EU. As we know all too well, all paths lead back to energy, hence lower total imports were aided by a 12.9 percent drop in oil imports for October versus the prior month - down to 6.78mn bpd, the lowest since January.

(Click to enlarge)

By Matt Smith

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




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