"2015 Carries Risks for Oil Prices"

There's a lot of oil around. In the U.S. and worldwide.
Brent $104.68 up 9 cents.
WTI $97.30 -$0.78.

From MoneyBeat:

 Expansions by U.S. refiners might not come soon enough to keep crude prices afloat in 2015, as the companies rush to add capacity to process more shale oil, Credit Suisse says.

This year, the market has managed to stave off threats of an oversupply by processing more oil and importing less. As crude production keeps rising, the challenge will be to keep prices from tanking next year.
“2015 looks a slightly more risky year for U.S. crude prices versus Brent than 2014,” Credit Suisse says. Brent is the global oil benchmark.

Despite growing production, the benchmark U.S. oil price has traded just $7.68 a barrel below Brent, on average, this year, up from an average discount of $10.59 a barrel in 2013, according data provided by FactSet.

The reason: New pipelines cleared bottlenecks, allowing oil supplies to more easily reach refineries on the Gulf Coast. Refiners also ran at higher rates to process more oil and reduced imports by between 350,000 and 400,000 barrels a day, Credit Suisse says.

But next year, imports will have to fall by 580,000 barrels a day to keep the supply-and-demand balance intact, the bank says. Otherwise, U.S. prices could fall sharply relative to global prices.

Most market participants expect U.S. oil prices will fall in the fourth quarter of this year, as refineries shut down units for seasonal maintenance and crude production continues at a rapid rate. Credit Suisse expects the price gap between U.S. and global prices to widen to $12 a barrel in the fourth quarter, then average $9 a barrel in 2015....MORE

And from the International Energy Agency:
IEA releases Oil Market Report for July

Lower economic growth outlook trims 2014 demand increase

12 August 2014

The IEA Oil Market Report (OMR) for August lowered its 2014 global oil demand growth forecast to 1.0 million barrels per day (mb/d) on lower‐than‐expected deliveries in the second quarter and the International Monetary Fund's weaker outlook for economic growth. But as the economy improves in 2015, demand is set to accelerate by 1.3 mb/d in 2015.

OPEC crude oil supply rose by 300 000 barrels per day (300 kb/d) to 30.44 mb/d in July, a five‐month high, as a boost from Saudi Arabia to 10 mb/d and a tentative recovery in Libyan output more than made up for declines in Iraq, Iran and Nigeria. The "call on OPEC crude and stock change" averages around 30.8 mb/d for the fourth quarter, just like in the third, the OMR informed subscribers.

The global oil supply increased 230 kb/d in July, to 93.0 mb/d, with higher OPEC output countering slightly lower non‐OPEC supply. Compared with July 2013, global supplies rose 840 kb/d, as a 1.2 mb/d increase in non‐OPEC supplies more than offset a 360 kb/d decline in OPEC output.

OECD industry stocks posted their sixth consecutive monthly build in June, rising 13.8 mb to stand at 2 671 mb at the end of the month, their highest level since September 2013. Inventories’ deficit to the five‐year average narrowed to 42.1 mb from 52.0 mb at the end of May. The second-quarter stock build of 88 mb was the largest quarterly build since the third quarter of 2006....MORE