With geopolitics less of an issue or price driver than it was the last few weeks the main oil price drivers are likely to be any and all macroeconomic data on the global economy with oil fundamentals equally important.
The International Energy Agency lowered its world oil-demand forecast for this quarter for a second time, citing weakness in Europe’s economy and disruption to U.S. fuel delivery and travel by Hurricane Sandy.
U.S. oil output is poised to surpass Saudi Arabia’s in the next decade, making the world’s biggest fuel consumer almost self-reliant and putting it on track to become a net exporter, the International Energy Agency said.
Crude oil is better supplied and demand growth is going to slow. Is there a better time to buy crude? Crude oil looks to break its three-week long losing streak as the doom and gloom over the fundamentals continue to roll in.
The combination of slow growth in the global economy along with current fundamentals that are starting to show signs of supply outstripping demand have kept oil prices hovering near the lower end of the trading range for the last two weeks.
Is it any wonder that even the IEA lowed its global oil demand forecast for 2012 and 2013 by 300,000 to 400,000 barrels a day? The IEA says 2013 oil demand growth at 0.8 million barrels a day down from 1 million barrels a day.
If the International Energy Agency tells you that the market is well supplied, you had better believe it. The agency that represents 28 consuming countries always wants to error on the side having too much oil as opposed to not enough.