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 ...):