Oil Cover

Oil Market Snapshot – July 2014

  • Brent price dropped by c. $10/bbl in the first half of July, from a 9-month high of $115.19/bbl
  • The forward curve for ICE Brent Crude Futures shifted to contango, in our view reflecting the current excess supply vs. rising uncertainty about future oil prices as regional conflicts intensify
  • We cut our oil price forecast for 2014 on strengthening US Dollar, but raised it for 2015, reflecting the upward sloping curve for oil future
  • Following the IMF's downgrade of its outlook for global GDP growth, we subsequently revised our global oil demand forecast to 1.1 million b/d for 2014 (1.2 million b/d in June) and 1.32 million b/d for 2015 (1.38 million b/d in June)
  • Additional supply applies downward pressure on oil prices but the amplified regional conflicts keep prices in check

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