This week saw the release of key agency forecasts, with the OPEC and EIA monthly reports released on Wednesday and the IEA report coming out this morning.
The key message across the board was one of continuing sluggishness of demand and sloppiness in non-OPEC supplies around the world except in the US. While all the balances, including our own, expect the call on OPEC crude to be lower y/y for both 2012 and 2013, there are still several risks to supply, including Iran, Libya, Sudan, Syria, Brazil, FSU, and so on, which could change the picture quite rapidly. Moreover, consistent with a point we have made several times in the past few weeks, the agency reports highlighted the tightness in the oil products markets, especially heating oil, ahead of the winter season. That in turn is likely to keep crude prices supported.