Global Oil Data Deck (August 2024)

Supply deficits intensified as early summer seasonal consumption picked up, but fundamental momentum remains bearish as demand growth continues to weaken more quickly than does supply.

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Overview

• Early summer demand pushed the oil market into deeper supply deficit in June but the deficit is softer compared to last summer; while data indicate that the market is currently in deficit, fundamental momentum remains bearish with demand growth slowing more quickly than also-flagging supply.

• Crude prices are under renewed pressure from a deteriorating demand outlook and, over the past week, the reversal of previously-heightened Iran-related volatility hedging; speculative positioning remains extremely oversold and is expected to shift to near-term tailwind once the Iran unwind is completed; crude term structure remains positive but backwardation is weakening through this latest selloff.