Some takeaways from the EIA’s Short Term Energy Outlook…

Here is the site:  http://www.eia.gov/outlooks/steo/pdf/steo_full.pdf

The EIA is looking for global supply/demand to balance in the second half of 2017:

But based on their chart, we could move more out of balance in the first half of next year (they show a global inventory build of +.8 1H17 and +.4 for all of 2017).

Here are days supply, also indicating a worsening surplus before declining:

As stocks continue to build, do prices move lower, sharply lower, remain unchanged, or move higher as the market anticipates a time when demand significantly outstrips supply….2018?… will it ever (peak demand?)?  Can OPEC quicken the process?  Implied volatility derived from options trading is near its long term average of around 33%… Is this too low?

Here are some other things I found interesting in the report:

“Since the fourth quarter of 2014, many companies have written down the value of their assets to reflect lower oil prices, which reduces earnings in the quarter in which a company recognizes the write-down. The increase in earnings this year is partially attributable to a reduction in asset write-downs, which declined 80% year-over-year. Additionally, company reductions in operating expenses were greater than the declines in revenue, contributing to higher profitability.”

And this chart, showing selected Purchasing Managers’ Indexes is one reason why we are seeing an increase in long term interest rates:

Finally, are cooling degree days becoming even more important to natural gas demand: