The World Is Awash In Crude Oil

The World Is Awash In Crude Oil

$OIL

The world is seeing the longest-lasting Crude Oil supply glut in about 30 yrs, and OPEC’s quest for market share will keep the supply glut on.

Crude Oil supply has exceeded demand globally for the past 5 Quarters, the longest supply glut since the Y 1997 Asian economic crisis, International Energy Agency (IEA) data show.

If the Organization of Petroleum Exporting Countries (OPEC) were to keep pumping at current rates it would become the longest surplus since at Y 1985 by Q-3 of this year, the data show.

There are few signs the 12-nation group will cut back.

Saudi Arabia, OPEC’s biggest member, will probably increase production to intensify pressure on US tight (shale) drillers. OPEC’s supplies may be swollen further this year if Iran reaches a deal with world powers to ease sanctions on its exports.

OPEC pumped 31.3-M BPD in May and will probably continue to pump around that level “in coming months,” the IEA said in a report on 11 June. The agency does not forecast OPEC production.

Producing at that level implies a global oversupply of 1-M BPD in the Q-3. and 600,000 BPD in Q-4, according to IEA projections for global demand and non-OPEC supply.

That would be the 8 consecutive Quarters of  surplus, exceeding the current record of 6 Quarters in Ys 1997 to 1998.

The Crude Oil glut could swell further if Iran and world powers reach an accord on the nuclear program by their 30 June deadline. The country could boost exports by 1-M BPD within 7 months of sanctions being removed, Oil Minister Bijan Namdar Zanganeh said in Vienna on 3 June.

Stay tuned…

HeffX-LTN

Paul Ebeling

The post The World Is Awash In Crude Oil appeared first on Live Trading News.