This bodes well for STO.westpac IQ Commodities Update 9.7.24 J....

This bodes well for STO.
westpac IQ Commodities Update 9.7.24 J. Smirk said

"Crude Oil

Our view on the crude oil market is little changed from last month. We continue to expect inventories to rise as we move through the second half of the year. As Westpac colleagueRobert Rennienoted, Brent above US$85/bbl is expensive but given the backdrop of Hezbollah and Israel strikes on each other, Hurricane Beryl being upgraded to category 5 event (the earliest and most violent storm to form in the Atlantic basin on records going back to 1851), CFTC positioning showing strong money manager demand, and the API reporting a 9.2mb slump in crude inventory last week, it is likely that Brent will remain well supported in the immediate near term.

Since publishing the July Market Outlook Tropical Cyclone Beryl is now tracking Northeast from Houston so attention will turn to the more medium-term supply with the release of the EIA STEO, OPEC’s Monthly Oil Market Report and IEA OMR. It will be interesting to see how these reports set the tone for ‘official’ supply and demand forecasts remembering that the IEA faced a lot of criticism for its ‘peak oil consumption forecast’ and warnings of“a major supply surplus emerging this decade, suggesting that oil companies may want to make sure their business strategies and plans are prepared for the changes taking places”.

With Rystad Energy reporting that OPEC compliance with collective supply cuts has been “almost perfect” with overproduction in June forecast at just 53,000bpd, down from 176,000 in May, suggesting that crude markets should be tightening over the summer and thus that we may be able to hold above $85 for a little bit longer. But as we move into the Northern Hemisphere winter, a moderation in demand to be met with continuing supply growth".

Commodities Update July 2024 | Westpac IQ