The market situation as reported from EIA and Bloomberg is summarized below:
- Supply is adding pressure to WTI. Market is in a downtrend and it may accelerate. WTI extended losses after the American Petroleum Institute reported U.S. crude inventories rose 5.1 million barrels.
- WTI fell 4.1 percent last week, the most in two months, after Saudi Arabia cut prices for November exports to Asia and the Organization of Petroleum Exporting Countries increased production in September.
- EIA cut 2014 and 2015 crude price forecasts because of rising output and reduced demand. WTI will average $94.58 a barrel in 2015 versus the September projection of $94.67.
- Brent crude declined after disappointing German output reinforced concern that global oil demand will falter. EIA projects that Brent crude oil prices will average $98/bbl in fourth-quarter 2014 and $102/bbl in 2015
Using the methodology of Error Correction Mechanism (ECM) developed by Eagle-Grager (2003 Economics Nobel Award) , we update the SLC (Sumateran Light Crude/Minas) forecast is as follows:
Based on the graph, we expect the October SLC will continue down to $94.8/bbl and SLC will average down to $ 103.9/bbl versus the September projection of $ 104.7/bbl
Disclaimer: The material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Opinions expressed are our current opinions as of the date appearing on this material only and would be updated every month.
Based on the graph, we expect the October SLC will continue down to $94.8/bbl and SLC will average down to $ 103.9/bbl versus the September projection of $ 104.7/bbl
Disclaimer: The material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Opinions expressed are our current opinions as of the date appearing on this material only and would be updated every month.