march 2017 giovanni serio - ief · 0000 4 cmoo 300000 imooo jan 06 aug 06 mar 07 nymex wti + rbob +...
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Oil Market Developments
March 2017
Giovanni Serio
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1 Oil Market Developments March 2017 1
The large expansion in supply has led to a sharp surplus
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2 Oil Market Developments March 2017
As a result global commercial oil stocks have surged
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3 Oil Market Developments March 2017 3
Forcing a rebalancing via non-OPEC production cuts
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4 Oil Market Developments March 2017 4
Storage capacity has increased significantly
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5 Oil Market Developments March 2017 5
China implied stock builds have set new highs
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6 Oil Market Developments March 2017 6
However, the relationship between commercial inventories and Brent structure has
remained strong
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7 Oil Market Developments March 2017 7
Other stocks, such has China, government stocks and Floating Storage have a weaker
correlation with time spreads
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8 Oil Market Developments March 2017 8
Since 2014, the market has been characterized by a pronounced “forward looking
behaviour”
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9 Oil Market Developments March 2017 9
Curvature in December hit near historical lows
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10 Oil Market Developments March 2017 10
Deferred spreads strengthening was behind this
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11 Oil Market Developments March 2017 11
In most prior examples curvature moves are driven by the prompt
spreads
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12 Oil Market Developments March 2017 12
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13 Oil Market Developments March 2017 13
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14 Oil Market Developments March 2017 14
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15 Oil Market Developments March 2017 15