Comments from Commerzbank on oil:

"The situation with crude oil is clear"

Demand for crude oil dipped by 0.2 million barrels a day in Q2

  • (Commerzbank citing data from the International Energy Agency (IEA) & their own our own seasonal adjustment)
  • But, its higher than expected at the start of the year, & demand trend "is still pointing upwards"

Decisive factor ... is the sharp rise in oil supply

  • Again citing IEA, oil supply in Q2 was more than five mln barrels/day higher than 2 years ago
  • Fracking boom in the USA
  • & Very strong increase in OPEC production in response
  • US production has fallen slightly recently, OPEC increased its output again in July
  • Add to this the expectation that Iran will export much more oil again soon


WTI opening lower to start the week (ps. each week I post a reminder of the illiquidity of the FX market on the Monday morning opening in Asia ... same for oil too ...):