Everything is so good in the oil market ? Despite some weakening point index of business confidence in the world and the mixed signals coming from several major oil consuming countries , the balance in the oil market in the current year was much narrower than many investors had expected , and it has supported prices. However, there is a fair question: how long the situation will remain positive for the oil market ? According to analysts Barclays Capital, if the summer driving season in the U.S. will be slightly more successful than expected , China begins to set records imported oil or geopolitical situation seriously deteriorates suddenly , oil prices in the next few months will be under pressure . In the short term drop in prices could exacerbate an unexpectedly large number of long positions accumulated in recent years on the market, the bank warned .
Unusually cold weather in the U.S., driven by the sharp rise in demand for distillates in the country, has contributed significantly to the oil market . Because of the cold and slowed growth in oil production . Despite the fact that these negative factors for proposals were partly compensated for by the relatively mild weather in Europe and moderate growth in demand for petrol, the result was higher than expected growth in oil demand in OECD countries and a significant amount of arbitrage distillates with the U.S. East Coast . However, it is only in the street grow warmer , and the key drivers of the market – demand – to move from fuel oil to gasoline market , with reserves exceeding the average for the current time , the level of influence of these factors inevitably fades confident in the bank.
On the verge of breaking , according to analysts , is a positive trend and the recent oil imports to China. In January, the volume of oil imports rose by 40 % from October 2013. and reached historic highs – 6.65 million bbl. / day . The main driver of growth was stockpiling against the backdrop of the commissioning of new refineries , completion of strategic oil reserves , as well as enhancing the role of China as an exporter of refined petroleum products to other Asian countries . Meanwhile, in the coming months, the pace of discovery refinery startups slowed dramatically in predicting Barclays Capital. As a result of slower pipelines will be filled , so that guarantees that China will be able to export as much oil as in January of this year , no. In the absence of these factors support the volume of oil imports in China may drop significantly , analysts say.
The market was also recently provided the dynamics of oil supply in the world. Because of the sanctions imposed on Iran, disruptions in production in Libya , sabotage and theft in Nigeria and attacks on oil infrastructure in Iraq supply disruptions from OPEC reached historical heights – about 3 million bbl. / Day . Situation worsened shortages in regions of non-OPEC : Yemen , South Sudan and the North Sea .
However, the impact of falling supplies from OPEC’s pricing in the oil market is gradually reduced . The current volume of production losses are observed in the market since August 2013. , And the market has learned to compensate for their bad . The growth of oil supply from non -OPEC countries , annually more than 1.5 million barrels. / Day (including hard-to increase production of oil in the U.S.) . In addition, other disruptions prompted OPEC to increase production to meet the current demand . And let the result of decreased volume of available production capacity and increased oil prices in the medium term, high prices will cause additional supply from non -OPEC countries , especially from the U.S..
In Barclays Capital doubts that the recent agreement with Iran over its nuclear program will lead to the speedy return of Iranian barrels on the world market . In addition , analysts say , there are still significant risks to oil production in Iraq and Nigeria. However, in the absence of major disruptions in any of these countries, the aggregate balance of risks to the OPEC oil production will shift for the better , or at least not get worse , believe in the bank.
Not considered a major factor in support of Barclays Capital and the conflict between Ukraine and Russia . Analysts do not rule out that in 2014 . Russia cancels the supply of crude oil (300 thousand bbl. / Day) exported through Ukraine , however, it will most likely result of decisions on a commercial level . Export as oil and petroleum products in other countries are unlikely to be threatened . Meanwhile, the risk of reducing natural gas export (which in the short term can stimulate growth in oil demand in Europe as a boiler fuel ) is also low . However, even if the payments difficulties and lead to such a development , the possible price increases will be limited in scope and duration, given the large inventory and low demand for gas in Europe .
Given the fact that over the next few months, the influence of factors supporting the price of oil this year , drops many speculative investors seem too late felt an urge to enter the market , analysts say. In recent weeks, investors have demonstrated a high NYMEX buying activity . In addition to the number of positions in nezahedzhirovannyh WTI, public asset managers , reached a historic high – 383 million barrels . , An increase of 100 million barrels . in the past four weeks has become one of the highest in the history of speculative activity in the oil market .
” We do not advocate the view that that the tail can wag the speculative oil dog, while fundamentals generally have greater weight than speculative flows . However, in circumstances where an excess of speculative positions is so great as now, and fundamental outlook deteriorates , rapid liquidation could lead to more dramatic than it could be, down movement in prices ” , – concluded analysts Barclays Capital.