Oil Fundamental Forecast – June 2016

Crude Oil closed out the month at 50.01 surprising traders with a gain of 9.53% this month. Traders are eagerly awaiting the June 2^nd OPEC meeting as oil traders pay little attention to rise in the US dollar. Brent Oil also closed above the 50-dollar level at 50.84 with a gain of 8% this month. Oil is up over 35% year to date, which has been a relief for US producers and energy companies.

Iraq will supply 5 million barrels of extra crude to its international oil company partners in June, industry sources familiar with the issue said, joining other Middle East producers by lifting market share.

Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries, had already been targeting record crude export volumes from southern terminals next month of 3.47 million barrels per day.

Asian imports of Iranian oil rose more than 13 per cent in April from a year before as Tehran vies to recoup market share lost under international sanctions.

Saudi Arabia, the world’s top crude exporter, and fellow OPEC producers Kuwait, Iran and the United Arab Emirates, also plan to raise supplies in the third quarter. OPEC’s 13 members meet in Vienna on Thursday to set the group’s policy, which is more focused on market share than on influencing prices.

UAE Minister of Energy Suhail Al Mazroui said on Tuesday he was happy with the oil market, noting that prices had been correcting higher.

“We are optimistic. We are seeing that the market is correcting upward,” Mr Al Mazroui told reporters in Vienna.

Crude will end the year higher than $60 a barrel, Mario Maratheftis, global chief economist at Standard Chartered, said on Bloomberg TV. SEB Bank forecast last week that Brent would touch $60 at times in 2016.

Robust demand in India and other emerging nations led the International Energy Agency in May to reduce its estimate of the global oil surplus for the first half. Brent last traded above $60 in July.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.

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