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Oil market prospects are Bearish and OPEC Triumphalism will not stop 2020 from becoming wicked




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Today, the oil market is a little rejoicing for the bulls, for the sake of an uncertain global outlook, US President Donald Trump's Twitter account, China-US trade tensions, is macroeconomic kerfuffle in europe and everything else in between, Brent – the global proxy oil futures benchmark – remains in technical buyback six months out ie the current price trades at a pricing for forwarding prices. 19659001] But carefully examine and You will find that the prize itself has narrowed to less than $ 2 per barrel, barely over a dollar on Tuesday, July 2 at the end of the Oil Exporting Organization (OPEC) two delayed ministerial meetings – with their 10 non-OPEC Russian leaders transferring collective production cuts of 1.2 million barrels per day (bpd) – before returning to around $ 1.50.

And the rollover they did expand know for Ma rch 2020 in a highly anticipated move that some commentators had misplaced optimism. But even intraday trading on Tuesday thumped that optimism. For OPEC, a "co-operation agreement" presented on its joint bid to reduce production, a poem about the charter, a comparison of the impending "decline" of the US shale output & nbsp; associated with the North Sea usual stretches between geopolitical rivals Saudi Arabia and Iran, but valuable little how the cartel intends to extract from the current production cycle of persistent over-consumption in spite of the cuts.

Increasing oil production is likely to keep the global crude market in surplus by 2020 (Photo: Thibault Camus / Associated Press) & nbsp;

Consider this – a coterie of 24 global oil producers, including two of the largest three in the form of Saudi Arabia and Russia, has announced coordinated production cuts. There is extreme tension in the Middle East. Libyan and Nigerian production remains challenging, while Venezuela's production decline gets worse this month. Trump's sanctions press Iran.

But for all of this, both Brent and West Texas Intermediate (WTI) remain sequentially incapable of escaping the range of $ 50-70 per minute. Barrel for most of this year, forward-looking prospects remain one of lower prices. Park the supply side argument for one minute, even though the US – currently the world's largest crude oil producer – pumps 12.3 million bpd, and is the tip to hit 13.4 million bpd by some forecasters .

Let's look at the demand side. Only one of the five largest global oil consumers – India – imports more than the 2018 level and takes over Japan to become the world's third largest raw importer. Of the remaining four, the US does not turn to the global market as it was used due to increasing domestic production. China's economic outlook remains cloudy with its post global financial crisis stimulus inspired oil import levels from 2010-12 unlikely to return.

Just last month, the International Monetary Fund (IMF) cut its forecast of economic growth in China to 6% next year; the lowest since 1990. At the same time, Japan and South Korea are seeing lower import levels. Couples who, with an increasing general level of discomfort about the global economy, and some very real concerns about a possible recession despite stock markets ticking well together. The US 30-year dividends ended on Wednesday, July 3, at 2.47%, which is their lowest level since October 2016, when the Fed's target was 2% lower than it is now.

"The last time the entire US curve was reversed this way and a recession did not follow was in 1986, when the bond market was led by a very sharp drop in oil prices, as OPEC production rose by about 25%, "Kit Juckes, Forex Head of SocGen.

At present, the recession or not, that the cartel's compliance with OPEC / non-OPEC cuts sometimes runs 163% due to S & P Global Platts data, and June headline production has come in as low as 29.60 million bpd ( down 170,000 bpd from May), according to the latest Reuters survey.

No ode to the oil market: OPEC publishes poems and confirms its new charter of cooperation between it and non-OPEC producers

OPEC

It is the lowest on record since 2014; and give OPEC less than a third of the global market share for the first time in nearly three decades. Yet OPEC, instead of recognizing its cuts, gives such kind of price support, but never officially acknowledges; American fluorescent barrels enter the break, leaving market share.

Initially, most American barrels were heading east for light sweet raw customers who lost to Malaysia and Indonesia when their respective production declines. But the industry's evidence is increasingly pointing to Asian refineries that change their refining complexes to treat readily available lighter US crude oil.

Let's argue to be positive and say that there will be no negative quarters for the rest of 2019, and 2020 sees no recessionary headwinds either. However, the oil market is still expected to be in surplus. In the best case, the International Energy Agency (IEA) reports that global demand growth will accelerate to 1.4 million bpd by 2020.

However, growth will be squared against an increase of 2.3 million. Bpd in production, as growing USA shale output will be associated with increasing production from Brazil, Norway and Canada. While the project puts the IEA surplus at 900,000 bpd, even the most conservative forecast I have seen – at the IHS Markit – has a surplus of at least 800,000 bpd.

Of course, OPEC can continue to cut and stop market share. But at some point something will give. All in all, my prediction for Brent is, on average, $ 65-70 per. Barrel range for 2019, closer to the lower end of it; and for West Texas Intermediate to fool in $ 55-60 per. barrel range again closer to the lower end.

However, all the variables are heading for a smoother smelly oil market that meets by bears by 2020. OPEC's triumphalism via charters and poems, and its disposal of a historic mistrust of the Russians will not prevent it.

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The oil market today gives a little cheers for the bulls, for the benefit of an uncertain global perspective, the US president Donald Trump's Twitter account, China and the United States' trade tensions, macroeconomic kerfuffle in Europe and everything else between each other, Brent – the global proxy oil futures benchmark – remains in technical return six months out ie the current price is trading at a premium for progress.

But carefully examine and you will find that the prize itself has been reduced to less than $ 2 per barrel, it barely held a dollar on Tuesday 2 July at the end of the Organization of Oil Exporting Countries (OPEC) two delayed ministerial meetings – with their ten non-OPEC Russian led colleagues to transfer collective production cuts of 1.2 million barrels per day (bpd) – before returning to around $ 1.50

And rollover they did and extended the drive to March 2020 in a highly anticipated move which some commentators had rejected optimism in. But just intraday trading on Tuesday thumped the optimism. For OPEC, a collaborative agreement was given on its joint bid to reduce production, a poem about the charter, a comparison of the imminent "decline" of US shale production with the North Sea, the usual stretches between geopolitical rivals Saudi Arabia and Iran, but precious little. how the cartel intends to withdraw from the current production cycle of persistent over-use despite the cuts.

Increasing oil production is likely to keep the world's global crude market in surplus by 2020 (Photo: Thibault Camus / Associated Press)

Consider this – a coterie of 24 global oil producers, including two of the largest three in the form of Saudi Arabia and Russia has announced coordinated production cuts. There is extreme tension in the Middle East. Libyan and Nigerian production remains challenging, while Venezuela's production decline is getting worse this month. Trump's sanctions press Iran.

But for all of this, both Brent and West Texas Intermediate (WTI) remain sequentially incapable of escaping the range of $ 50-70 per minute. Barrel for most of this year, forward-looking prospects remain one of lower prices. Park the supply side for a moment, even though the US – currently the world's largest crude oil producer – pumps 12.3 million bpd and is plunged to hit 13.4 million bpd by some forecasters.

Let's look at the demand side. Only one of the five largest global oil consumers – India – imports more than the 2018 level and takes over Japan to become the world's third largest raw importer. Of the remaining four, the US does not turn to the global market as it was used due to increasing domestic production. China's economic outlook remains cloudy with its post global financial crisis stimulus inspired oil import levels from 2010-12 unlikely to return.

Just last month, the International Monetary Fund (IMF) cut its forecast of economic growth in China to 6% next year; the lowest since 1990. At the same time, Japan and South Korea are seeing lower import levels. Couples who, with an increasing general level of discomfort about the global economy, and some very real concerns about a possible recession despite stock markets ticking well together. The US 30-year dividends ended Wednesday, July 3, at 2.47%, their lowest level since October 2016, as the Fed Fund target was 2% lower than it is now.

"The last time the entire US curve was reversed in this way, and a recession did not follow, was in 1986 when the bond market was led by a very sharp drop in oil prices, as OPEC production rose by about 25% "says Kit Juckes, Forex Head at SocGen.

At present, the recession's compliance with OPEC / non-OPEC cuts is sometimes running at 163% of the data from S & P Global Platts, and junior transcripts have reached as low as 29.60 bpd (down 170,000 bpd from May ) according to the latest Reuters survey.

No ode to the oil market: OPEC publishes poem and confirms its new charter of cooperation between it and non-OPEC producers

OPEC

It is the lowest on record since 2014; and give OPEC less than a third of the global market share for the first time in nearly three decades. Yet OPEC, instead of recognizing its cuts, gives such kind of price support, but never officially acknowledges; American fluorescent barrels enter the break, leaving market share.

Initially, most American barrels were heading east for light sweet raw customers who lost to Malaysia and Indonesia when their respective production declines. But the industry's evidence is increasingly pointing to Asian refineries that change their refining complexes to treat readily available lighter US crude oil.

Let's argue to be positive and say that there will be no negative quarters for the rest of 2019, and 2020 sees no recessionary headwinds either. However, the oil market is still expected to be in surplus. In the best case, the International Energy Agency (IEA) reports that global demand growth will accelerate to 1.4 million bpd by 2020.

However, growth will be squared against an increase of 2.3 million. Bpd in production, as growing USA shale output will be associated with increasing production from Brazil, Norway and Canada. While the project puts the IEA surplus at 900,000 bpd, even the most conservative forecast I have seen – at the IHS Markit – has a surplus of at least 800,000 bpd.

Of course, OPEC can continue to cut and stop market share. But at some point something will give. All in all, my prediction for Brent is, on average, $ 65-70 per. Barrel range for 2019, closer to the lower end of it; and for West Texas Intermediate to fool in $ 55-60 per. barrel range again closer to the lower end.

However, all the variables are heading for a smoother smelly oil market that meets by bears in 2020. OPEC's triumphalism via charters and poems and its disposal of a historic mistrust of the Russians will not prevent it.


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