Around The Barrel – Crude Oil, Gasoline and Distillates Outlook

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    In a volatile trading week EIA reported huge…



    The Energy Information Agency (EIA) cuts 2019/2020 oil demand

    Cuts 2019 world oil demand by 160K BPD to 1.22M BPD YoY increase
    Cuts 2020 world oil demand by 110K BPD to 1.42M BPD YoY increase

    Sees US crude output rising 1.36M BPD in 2019 to 12.32M BPD (vs 1.49M BPD last month)
    Sees US crude output rising 94K to 13.26M BPD in 2020 (from 93K BPD increase previously).

    Energy: STEO Petroleum Overview Highlights:

    OECD total oil stocks covered 63.1 days of supply at the end of May, up 1.5 days from the revised April level. Inventory coverage was 3.0 days more than a year ago and 0.2 day less than the five-year average.

    The year-on-five-year average surplus compares with a 0.6-day deficit a month ago. 

    Global petroleum demand for 2019 was revised lower by 0.22 to 101.14 mmbpd this month, an increase of 1.22 mmbpd (1.2%) over 2018.

    Demand growth is expected to strengthen to 1.42 mmbpd (1.4%) to reach 102.56 mmbpd in 2019, a downward revision of 0.33 mmbpd from last month’s forecast. 

    Non-OPEC crude oil production growth of 2.16 mmbpd (3.4%) if forecast for 2019, a downward revision of 0.15 mmbpd from a month ago. Growth is seen rebounding to 2.56 mmbpd (3.9%) for 2020. US output was reduced 0.13 mmbpd to 12.32 mmbpd for 2019 and by 0.12 mmbpd to 13.26 mmbpd for 2020. 

    Net of other changes, the call on OPEC crude oil that averaged 31.22 mmbpd in 2018 is seen declining 0.78 mmbpd to 30.44 mmbpd for 2019 and by 0.99 mmbpd to average 29.45 mmbpd in 2020. 

    OPEC crude oil production declined 0.21 mmbpd to average 29.93 mmbpd during May as further declines in Iran and Venezuela was only partially offset by added Saudi barrels. 

    WTI crude oil prices averaged $65.06 per barrel in 2018. The 2019 price forecast was reduced $3.50 this month to $59.29 per barrel. The 2020 forecast was left unchanged at $63.00 per barrel. 

    Brent crude oil averaged $71.19 in 2018. The Brent forecast for 2019 was lowered $2.95 this month to $66.69, a premium of $7.40 over WTI. Brent is expected to average $67.00 in 2020, unchanged from a month ago and a $4.00 premium over the WTI forecast.


    1. The full text and tables of the Short-Term Energy Outlook can be found on the internet at http://www.eia.doe.gove/emeu/steo/pub/contents.html. Much of the data used here comes from table 3a.

    2. Some of the following charts, such as those featuring the call on OPEC crude oil contain measures calculated based on the data contained in the Short-Term Energy Outlook but not found directly in the government report.

    3. The forecast of OPEC production is our own, based on stated OPEC targets and our own assessment of likely compliance rather than on the DOE’s forecast that may assume future OPEC policy changes. As a result, our projected supply/demand balance will differ from the projected changes in inventories found in the government report.

    4. Please note that while data of the past few months may be referred to as “actual” it may still be preliminary and subject to later revision.


    Ahead of API WTI settles Up 1 cent at $53.27.

    high $54.04.
    low $52.96.

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