- Brent SPOT hits the $110/bbl level in February on low inventories, weaker non-OPEC oil production, continued OPEC supply disruptions and a relatively weaker USD
- We revise our Brent price upwards to $105.82/bbl (+$0.55) for 2014 and $104.11/bbl (+$0.26) for 2015, reflecting the supportive global demand (OECD in particular)
- We still look for solid growth in global oil demand this year, 90% driven by non-OECD countries (on our estimates), but slash the non-OECD forecast by 20,000 b/d and 30,000 b/d for 2014 and 2015, respectively on the back of lower GDP forecasts
- OECD oil demand growth will increase slightly in 2014, on our projections, and accelerate in 2015 in line with the IMF’s economic outlook for the region
- In terms of supply, first US crude exports to Europe remain limited in volume and impact, but could eventually provide support to WTI prices
- Weaker supply in both OPEC and non-OPEC countries in January contributes to high oil prices, but such support may ease a little through the year as non-OPEC production improves; OPEC supply remains uncertain in Iran, Iraq, Libya and now Venezuela.
by Graham Walker // 28 February, 2014
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