Technical & Fundamental Oil Reports Specialists

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The oil numbers are clear

Published Wednesday, December 23rd, 2015

This will be the last fundamental commentary from PVM this year. For the remainder of the year we will provide headlines in bullet form only. As a last word we thought it useful to remind readers of what, as of today, the 2016 oil balance is shaping up to look like as something to cling onto when headlines distract. The biggest problem for oil bears is that prices are already so low, leaving a huge upside. The sort of situation that gives you Christmas nightmares if you are short. Having numbers close at hand may be a way of remaining calm and seeing the wood for the trees.

— The consensus is that OPEC produced 31.7 mbpd in November. Iraq claims that exports will hit another record high in December. It is likely that OPEC production will be pushing very close to 32 mbpd as we leave 2015 and enter 2016.

— Iran is showing every intention of meeting all of the conditions for sanctions to be lifted by the end of January, before important elections at the end of February. Iran is adamant it will be able to lift production by 500,000 bpd from Day 1 and there are already signs of additional exports leaking out. It is a reasonable base case assumption therefore that OPEC production will rise to 32.25 mbpd in 1Q, rising to 32.5 mbpd in 2Q.

to read the rest of the report, please click here

Posted by David Hufton