OIL MARKET IS HEALTHIER
The global oil market is healthier than it looks, signaling that crude's plunge to six-year lows has probably gone too far.
While futures tumbled below $45 a barrel in London for the first time since 2009, Morgan Stanley and Standard Chartered Plc say other measures suggest physical markets for crude have stabilized or even strengthened in recent weeks. China, the world's second-biggest oil consumer, will keep buying extra barrels to fill its strategic reserve this year, according to Goldman Sachs Group Inc.
"While oil fundamentals aren't strong, physical markets do not corroborate the substantial weakness in flat price," New York-based Morgan Stanley analyst Adam Longson said in a report Monday. The "latest oil pricing pressure appears more financial than physical."
A measure of returns from commodities sank to its lowest since 1999 Monday on concern that a slowing economy in China, the world's largest consumer of energy and raw materials, will exacerbate supply gluts. Brent crude, the international benchmark, has dropped more than 30 percent since May on the ICE Futures Europe exchange in London. Prices rebounded 3.1 percent to $43.98 a barrel at 11:10 a.m. in London.
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U.S. EIA - Energy companies’ free cash flow—the difference between cash from operations and capital expenditure—was $119 billion for the four quarters ending June 30, 2018, the largest four-quarter sum during 2013–18 Companies reduced debt for seven consecutive quarters, contributing to the lowest long-term debt-to-equity ratio since third-quarter 2014
OPEC - Total oil demand for 2018 is now estimated at 98.82 mb/d. In 2019, world oil demand growth is forecast to rise by 1.41 mb/d. Total world oil demand in 2019 is now projected to surpass 100 mb/d for the first time and reach 100.23 mb/d.
ARAB NEWS - Oil exports from southern Iraq are heading for a record high this month, two industry sources said, adding to signs that OPEC’s second-largest producer is following through on a deal to raise supply and local unrest is not affecting shipments.
PLATTS - The International Energy Agency expects the US to account for 75% of the global growth in natural gas exports over the next five years, a bullish outlook for LNG developers facing challenges at home getting projects off the ground and abroad with tariffs affecting trade flows.