From FT Alphaville:
Oh my. We hope you’re sitting down because the following might come as a bit of a shock.
On Tuesday Goldman Sachs’ commodity team admitted they may have got something wrong:
offshore stocks – much more difficult to monitor — were coming in to compensate...MOREThe market remains caught in the tug-of-war between weaker-than-expected DM demand, which creates near-term downside risk and stronger-than-expected EM demand, which creates longer-term upside risk, leaving the market in a new higher trading range.
Emerging markets demand has continued to surprise to the upside over the past months, yet this failed to offset the lag in developed market distillate demand, leading inventories to draw more slowly than we anticipated. However, the market is increasingly expecting EM demand to crowd out future OECD demand growth, and is putting upward pressure on long-dated prices, leaving the market in a new higher trading range of $75/bbl to $82/bbl.