Oil Market Snapshot — August 2015

  • August was marked by significant oil price volatility with swings of 10% magnitude
  • After steep declines due to stock market turmoil, Brent recovered by 10% to $47.56/bbl on 27th August driven by short covering and strong US GDP data
  • We lower our 2015 and 2016 forecasts significantly as a result
  • We maintain our forecast for strong global oil demand growth of 93.5 million b/d in 2015 (+1.42 million b/d y-o-y)
  • E&P industry asset trading and M&A activity have accelerated in 2015 after a slow 2014
  • We expect this trend to increase during the October redetermination season, especially for distressed US LTO operators
  • We forecast lower global oil supply growth of 2.04 million b/d in 2015, still outstripping demand growth by c. 30%
  • Lower prices have seen projects worth c. $142 billion in capex and 2.5 million b/d of production capacity over 2015-19 being delayed or cancelled

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