Oil Prices Fall As IEA Points At Poor Fundamentals

15 Jun 2017   IEA

Oil slumped again on Wednesday on a downbeat assessment from the IEA regarding the health of the oil market. After posting some relatively optimistic projections for the “rebalancing” process in recent months, the IEA has had to concede that the massive inventory overhang might last longer than it originally predicted. The report came in the same week that OPEC published its monthly Oil Market Report, in which it too admitted that the oil market was adjusting at a “slower pace” than expected. The IEA pointed to several different metrics that don’t bode well for higher prices. First, total OECD inventory levels “increased by more than the seasonal norm” in April. Crucially, inventories in the OECD have actually grown year-to-date, despite five months’ worth of OPEC cuts. As a result of rising U.S. shale production, weak gasoline demand, high levels of U.S. imports, and a drop off in exports, U.S. […]

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