4 September 2019
- Our proprietary short-term systematic fundamental model is finally picking up some supply tightness on the market. There are still plenty of signs to suggest that we are in a period of looser global oil supply so the tightness may be short-lived. We need more data to assess the longevity of the impact. Since output is at all time high again, reduced forward supply must therefore come from the inventory changes and import flow.
- Our short-term demand assessment has improved further since our last publication. The positive change can be explained by the notable improvement in refineries profitability. The result is below average amount of idle capacity which should support demand in the short-term. Our forward demand view remains downbeat as we expect imminent slowdown on the back of weak economic data and seasonal cyclicality.
- Our short-term macroeconomic view remains bullish. Signals from the FX markets are finally starting to support prices. It points to potential further gains for the oil market in September. It is also worth mentioning that the short-term credit conditions in key oil importers have improved, albeit from a low base. This is a short-term positive development which comes to confirm the overall bullish view discussed above.