Edward Bell - Commodity Analyst
Published Date: 14 June 2018
Bulls won the tug of war over the EIA data overnight as a more than 4.1m bbl draw in crude stocks and declines across much of the rest of the barrel helped to push oil futures up at the close. Healthy gains in refinery runs and utilization also helped point to a positive sign for demand as we head into summer months.
Source: EIA, Emirates NBD Research
Production in the US continue to move higher and is now just 100k b/d below 11m b/d. The EIA recently revised up its forecast for oil supply growth in 2018 to 1.44m b/d and output last week was up 1.57m b/d on year ago levels. The pace of production growth is increasing and appears likely to hit the EIA’s June target of 1.7m b/d y/y growth. High base effects for the second half of the year mean supply growth is expected to slow. But if producers punch above the EIA’s forecasts we expect the WTI/Brent spread will remain persistently wide.
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