Oil Cover

Oil Market Snapshot – November 2014

  • Brent briefly fell to $71.20/bbl on 28th November, following OPEC’s decision not to reduce oil oversupply
  • We have cut our 2014 and 2015 price forecasts further, with 2015 forecast a full $10/bbl lower
  • Global oil production grew to 94.2 million b/d in October (+50,000 b/d m-o-m and +35,000 b/d y-o-y) driven by OPEC production levels persistently above official targets (settling at 30.60 million b/d), growth in US LTO and deepwater oil production
  • November PMI shows a reduction in the Eurozone’s economic growth; key European economies achieved a combined net growth of only 0.6% y-o-y
  • Chinese PMI dropped to 50.0, suggesting no economic growth from October
  • But People’s Bank of China interest rates cuts and potential Strategic Petroleum Reserves procurement could push up Chinese oil demand higher than expected
  • Persistent low prices will put production growth from unconventionals (LTO in particular) at risk from 2H 2015 due to lower CAPEX spending
  • This could lead to shortages and higher prices long-term

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