Here are some nuggets from the summary:
Increased stock levels, especially in the U.S. are no surprise:
“Export volumes are still appearing in storage around the world and, as part of this, US stocks are building. The US is seeing a triple surge in supply: rising imports (exports are also growing), rising domestic production and falling refinery utilisation. For crude imports, volumes so far this year are close to 400 kb/d higher than a year ago; US crude oil production has increased by 400 kb/d since September; and refinery runs fell from 17 mb/d at the start of the year to only 15.5 mb/d at the beginning of March. It is hardly surprising, therefore, that we have a big backlog of unabsorbed crude oil.”
Destocking will take time, but will demand estimates be realized?
“So, the market is still dealing with a vast amount of past supply, which will take time to work its way through the system. Meanwhile, demand growth has not provided any further encouragement after three consecutive months when we upgraded our estimates. Our annual outlook for 2017 remains unchanged with demand expected to grow by a healthy 1.4 mb/d, although within the annual average we revised down our 1Q17 growth forecast by 0.3 mb/d and revised up our 4Q17 forecast by the same amount.”
OPEC cuts are encouraging, but are they?
“…the implementation of the OPEC production agreement appears in February to have maintained the solid start seen in January. For the first two months of the deal the compliance rate averaged 98%, although the figure is very heavily influenced by Saudi Arabia whose rate was considerably higher at 135%.”
Here is their chart showing supply/demand:
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