Ahead of sanctions on Iran, several other OPEC members have increased exports sharply. The timing mismatch between these effects is pressuring oil prices. Yet, markets are not as well supplied in 2H18 as Brent time spreads suggest. Much depends on Iran but we still see a tight balance to year-end.
Oil prices have come under pressure, down nearly $8/bbl over the last seven days: Several factors have rapidly come into focus. On the demand side, concerns have been growing over global trade, possible yield curve inversion and the roll-over in PMIs. On the supply side, production in Libya has staged a partial comeback,a release from the US Strategic Petroleum Reserve has become a growing possibility,and the possibility has emerged that the US government introduces some waivers around the Iranian sanctions.
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