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Crude oil

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Crude Oil Overview Jan 2014. CFD Master

Crude Oil prices dropped after the EIA released its weekly report. Increase in US Crude Oil production and high supplies of petroleum product with lower demand is undermining Crude Oil prices for 2014.

EIA expects that WTI crude oil prices will average $93/bbl in 2014 and $90/bbl during 2015.

Crude Oil prices are just above the lower level of the support line and there is a risk that prices could fluctuate lower and trade between the retracement level at $85 and $90.

EIA Summary of Weekly Petroleum Data for the Week Ending January 3, 2014

U.S. crude oil imports averaged 8.0 million barrels per day last week, up by 466 thousand barrels per day from the previous week.
U.S. commercial crude oil inventories decreased by 2.7 million barrels, from the previous week.
Strong U.S. crude oil production growth forecast

Strong growth in U.S. crude oil production, primarily attributable to growing volumes of light crude oil produced from onshore tight oil formations, has reshaped global oil markets in recent years.
EIA estimates that U.S. crude oil production averaged 7.5 million barrels per day (bbl/d) in 2013, the highest annual average rate of production since 1989, and a 1.0-million-bbl/d increase from 2012.
EIA projects crude oil production to average 8.5 million bbl/d in 2014 and 9.3 million bbl/d in 2015.
The United States relied on net imports (imports minus exports) for about 40% of the petroleum (crude oil and petroleum products) that we consumed in 2012.
Supply

Supply disruptions within the Organization of Petroleum Exporting Countries (OPEC) continue to be largely offset by crude oil production increases in non-OPEC countries.
Concerns over future economic growth broadly declined.
Surplus crude oil production capacity in December was about 0.3 million barrels per day (MMbbl/d) higher compared to the previous month, applying slight downward pressure to crude oil prices.
EIA expects production from countries outside of the Organization of the Petroleum Exporting Countries (OPEC) to grow year-over-year by a record high of 1.9 million bbl/d in 2014.
Global supply disruptions reached a high of 3.1 million bbl/d at the end of 2013 and remain close to that level at the start of 2014.
Demand

World oil demand growth in 2014 remains at 1.0 mb/d small increase compared to 2013.
2014 growth is expected to come from the non-OECD, which is seen increasing by 1.2 mb/d.
OECD demand is projected to contract by 0.2 mb/d, which represents an improvement from the current year.
China’s demand growth in 2014 is expected at 0.3.
Demand growth in OECD Americas is expected at 0.1 mb/d.
OECD Asia Pacific consumption is projected to contract by 0.1 mb/d.
Crude oil and the U.S. Dollar

The negative correlation broke down during the crude oil supply disruptions at the end of the third quarter...

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Crude oil

  1. 1. CRUDE OIL Overview Jan 2014 Source EIA Prepared by CFDMaster.com

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