Oil Cover

Oil Market Snapshot – May 2014

  • Brent broke the $110/bbl resistance for the first time since early March
  • Oil supply disruptions persisted in Libya
  • World oil demand was particularly strong, exceeding our expectations despite a weakening Chinese economy
  • WTI-Brent spread roughly flat at c. $8/bbl, but in our view likely to widen as US inventories build up
  • OECD inventories rose to 2,586 million barrels in April after their lowest level since 2010 of 2,566 million barrels in March
  • Our mid-term outlook remains unchanged, with increasing oil output from North America, Iraq and Iran
  • We thus raise our 2014 and 2015 forecasts to $107.13 (+$0.71) and $103.36/bbl (+$0.44), respectively
  • But we maintain our overall bearish oil price projection over the forecast period (end of 2015)

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