Oil fundamental drivers
Global Oil Dynamics
oil prices are likely to gain in the near future and decrease later on
Insights
CONCEPT
The dashboard tracks US EIA’s official data on global demand and supply for oil and predicted oil inventories (their gap), both in the past and for the future 20 months. Mapping forward-looking inventory estimates can help investors identify upcoming market tightness and imbalances that directly feed into the oil price.
CURRENT READINGS
- Looking at the recent past, we moved from oversupply in the oil market to demand exceeding supply, as the recent squeeze in oil inventories can also confirm. Focusing on forward estimates, demand is going to exceed supply in the near future with a drawdown in inventories, then oversupply will follow and inventories will eventually re-adjust.
MARKET IMPLICATIONS
- Given the above expectations on demand, supply and resulting inventories, and ignoring unpredictable geopolitical developments, fundamentals show that oil prices are likely to gain in the near future and decrease later on In general terms, expected inventory drawdowns typically push oil prices higher, while expected inventory build-ups suppress prices.