West Texas Intermediate (WTI) closed higher last week at $69.36 as seasonal high demand witnessed inventories draw down last week of -5.9 million barrels with demand outpacing supply by 10 million barrels in the last 14 days. Prices remain bid and will soon reach our next target of $76.47 as June prices opened at $67.07 and if close higher for June will confirm prices are once again moving to new 2018 highs with a daily open and higher close above $72.87 confirming the move to $76.47 is underway.
Last weeks IEA report revealed US daily production reached 10.9 million barrels for the week ending June 15 while total global production peaked at 99.3 million barrels per day. However, during the same period global consumption reached 100.2 million barrels leaving a global deficit of 900,000 barrels per day. During last week’s OPEC oil ministers meeting a compromise was reached to raise production by 1 million barrels per day but no date was given as to when this increase will take place. Emerging market growth and global industrial rebound remain as the key factors contributing to this unprecedented and sustained global demand. Recent forecast expect daily demand to exceed 102 million barrels per day buy 2019.