The combination of a strong US dollar and a weak IEA report is clobbering crude today. As the market limbers up for tomorrow’s EIA report, hark, here are five things to consider in oil markets today.
1) The release of the monthly IEA report has served to wop-bom-a-loo-mop-a-lomp-bam-wallop crude prices today, as it delivered a plethora of bearish prognostications. The agency revised demand growth lower for this year by 100,000 barrels per day to +1.3mn bpd, driven by ‘wobbling’ Asian demand, and falling consumption in Europe. (nice execution of the word ‘wobbling’).
Next year’s oil demand growth was also revised lower, by 200,000 bpd to +1.2mn bpd. Given this expectation for easing growth, in combination with a rebound in non-OPEC supply next year, IEA sees a situation of oversupply persisting into 2017.
Oh, and OECD total inventories reached a new record of 3,111 million barrels in August.
2) While much focus remains on Saudi, Iraq and Iran, UAE has seen production reach a new record high last month at 3.09mn bpd, according to IEA (OPEC direct communications have it pegged at 3.15mn bpd).
As our ClipperData illustrate below, UAE consistently exports