• 4 minutes Energy Armageddon
  • 6 minutes "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 12 minutes "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 5 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 16 hours Is Europe heading for winter of discontent with extensive gas shortages?
  • 32 mins "False Flag Planted In Nord Stream Pipeline, GFANZ, Gore, Carney, Net Zero, U.S. Banks, Fake Meat, and more" - NEWS in 28 minutes
  • 6 days Wind droughts
  • 6 hours ""Green" Energy Is a Scam. It Isn't MEANT to Work." - By James Corbett of The Corbett Report
  • 3 days Kazakhstan Is Defying Russia and Has the Support of China. China is Using Russia's Weakness to Expand Its Own Influence.
  • 9 days "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 2 days Xi Is Set To Be Re-Elected As China’s Leader
  • 7 days Oil Prices Fall After Fed Raises Rates
  • 9 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 2 days 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 12 days Beware the Left's 'Degrowth' Movement (i.e. why Covid-19 is Good)
Oil Prices Could Be Set For Another Sharp Rise

Oil Prices Could Be Set For Another Sharp Rise

Bullish and bearish catalysts are…

Fears Of Economic Slowdown Cap Crude Prices

Fears Of Economic Slowdown Cap Crude Prices

Tightening monetary policy is expected…

Alex Kimani

Alex Kimani

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

More Info

Premium Content

The Oil Market Isn’t Broken, It’s Just Responding To A Supply Surplus

  • Standard Chartered: The latest selloff doesn’t mean the market is broken.
  • Standard Chartered analysts say the market is “well-functioning” and the simple answer is a “sharp swing into surplus”.
  • StanChart analysts estimate the Q3 surplus at 1.82 million barrels per day.

As oil prices continue to plunge, with the latest selloff triggered by a surprise crude build and another release from the Strategic Petroleum Reserve, commodity analysts at Standard Chartered say the oil market is not fundamentally broken but is rather merely responding to a surplus. 

In its latest commodities market update on Thursday, StanChart says that the global oil market is currently in excess supply, with the U.S. transferring an average 0.83 million barrels per day (mb/d) into commercial inventories in the third quarter. 

StanChart analysts estimate the Q3 surplus at 1.82 million barrels per day, and suggest that forecasts–notably from U.S. investment banks–that were indicating the potential for $150 oil were wrong and that the market “has not yet fully priced in the extent to which that assumption proved wrong”. 

While forecasters have blamed market mechanism failures, volatility, trader irrationality and low liquidity for the recent plunge in oil prices, Standard Chartered analysts say the market is “well-functioning” and the simple answer is a “sharp swing into surplus”.  

Now, “with a large global flow surplus and those transfers available to rebuild inventories, US oil data has been mainly bearish in Q3,” Standard Chartered writes, adding that “The latest Energy Information Administration (EIA) release continues that trend, with our US oil data bull-bear falling 8.3 w/w to a highly bearish -70.0.” 

Standard Chartered described early indications of September demand as “weak”, noting that “demand for all products is lower y/y except other oils. The distillate data was particularly weak, with a sharp 4.22mb inventory build and the lowest implied demand in 20 months.”

By Alex Kimani for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Mamdouh Salameh on September 16 2022 said:
    The global oil market fundamentals that took Brent crude into $120 a barrel haven’t changed meaning that the market is still in its bullish state since 2014, global oil demand is still robust and the global spare oil production capacity including OPEC+ continues to shrink. So those hoping for a further fall in oil process will be soon disappointed.

    The global oil market is merely reacting to concerns about COVID lockdowns in China. These will soon ease and both oil demand and prices will soon resume their surge.

    I am still of the opinion that Brent crude could still surge to $110-115 a barrel before the end of the year particularly if G7 leaders go ahead with their proposed cap of Russian crude oil prices.
    The stupid price cap is doomed to fail since President Putin can kill it anytime with a scratch of a pen. He could halt all exports to countries imposing the cap thus sending prices to the stratosphere.

    Russia is neither short of buyers nor of markets or tankers to ship its crude and its revenues will continue to soar thus torpedoing the motivation behind the price cap.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News