BMI Global Oil Market Report Q410: Waiting for the Wind to Change

Friday, Sep 03, 2010

Research and Markets (http://www.researchandmarkets.com/research/af5edd/bmi_global_oil_mar) has announced the addition of the "BMI Global Oil Market Report Q410: Waiting for the Wind to Change" report to their offering.

“BMI Global Oil Market Report Q410: Waiting for the Wind to Change”

Drifting With The Tide - Q210 Oil Market Review

Although Q2 started with encouraging oil market strength, this had largely dissipated by the end of the quarter. Little changed in terms of oil market fundamentals but there was a major shift in sentiment among investors and forecasters. Eurozone economic woes, China jitters and a general sense of macroeconomic fragility meant that oil prices were dragged lower with equities and currencies. Crude once again became a stock market proxy, with little enthusiasm for the commodity.

Seemingly endless bad news from the Gulf of Mexico (GoM) hardly helped encourage oil market speculation, as BP's very public battle with US President Obama cast a shadow over future upstream developments and oil company prospects. None of this was actually negative in terms of near-term price prospects, but investors needed little excuse to avoid oil.

Demand projections for 2010 continued to firm up during the second quarter, even though the jury is still out regarding the strength and sustainability of the economic recovery. The imposition of tougher sanctions by the UN against Iran failed to increase oil market tension. Inventories have changed little and OPEC policy appears to be one of ignoring likely over-supply in the hope that it will go away without action being required.

According to the International Energy Agency (IEA)s July 2010 monthly Oil Market Report (OMR), OECD end-May commercial oil inventories stood at 2,757mn barrels (bbl), up 35mn bbl from the April level. This increase was broadly in line with the five-year average stock build, representing a relatively benign development. More worrying, perhaps, is an estimated build of 3.5mn bbl in June, at a time when a draw of around 8.7mn bbl is usually expected. Crude stocks emerged lower, but this improvement was outweighed by a products gain largely in the US.

In terms of production, the worrying OPEC output trend seen earlier in the year appears to have been reversed or, at least, stabilised. June saw global oil supply fall by more than 250,000 barrels per day (b/d) according to the IEA. OPEC and non-OPEC producers saw volumes fall during the month. Crude oil supply from OPEC averaged 28.9mn b/d in June (IEA estimate), down by 65,000b/d when compared with the previous month. Much of this reduction, however, reflects Iraqi cutbacks, with the 11 core members actually increasing supply by some 40,000b/d. Quota compliance of around 59% is now pretty stable and close to the historical OPEC norm.

Non-OPEC supply in Q2 has been fairly stable when compared with the first quarter, but has shown a clear weakening trend during the three months. Output of around 52.7mn b/d in April slipped to 52.4mn b/d in May and emerged still lower at around 52.2mn b/d in June. Among the major contributors to the June downturn were Norway and the US. Average Q210 non-OPEC supply is put at around 52.4mn b/d, compared with 52.5mn b/d in Q1.

Key Topics Covered:

• Global Oil Market Review
• Global Oil Market Outlook
• Oil Supply and Demand Outlook Q310
• Global Oil Products Market Review
• Plane Talking: Jet Fuel Trends
• Global Oil Products Price Outlook

For more information visit http://www.researchandmarkets.com/research/af5edd/bmi_global_oil_mar

Source: Business Wire