Izabella is probably the best financial journalist writing on hydrocarbons and puts together a post that implicitly rather than explicitly warns of supply overcapacity.
As always, your mileage may vary.
WTI down another 68 cents at $99.06, Brent $104.21 off $1.41.
We expect prices in the $80's.
From FT Alphaville:
The ‘Crude Wall’ cometh
These two charts come from Citi’s commodities research team:
They’re important. The reason being…well, we may have become used to talking about Saudi America, but we haven’t yet figured out the longer term consequences of America’s oil production resurgence.
Here's Brent via OilPrice:
According to the charts, not only is the shale revolution breaking down America’s dependence on foreign oil, it’s African crude — rather than Middle Eastern — that it’s displacing the most.
This makes sense because African crudes such as Nigerian Bonny Light tend to be light sweet varieties which compete with both Brent and WTI. And that has implications … well, here’s JBC Energy noting on Tuesday the big shift that’s occurring in the Brent market at the moment (our emphasis):
All North Sea indicators point to an extremely weak market at present. The Brent market structure is in deep contango as refiners are in maintenance and arb opportunities to the Far East are scant ahead of peak Asian maintenance and thereafter terminal maintenance at the Forties VLCC loading point over May and June. Greater availability of Forties has coincided with weaker Urals differentials in NWE, triggering more intense competition and lower Forties prices, which were last assessed at discounts to the Brent forward strip.Brent in other words is coming under pressure.
More from JBC on Tuesday, meanwhile, on why that may be....MORE
Recently:
EIA: "Crude oil inventories at Cushing, Oklahoma, hub down 32% over the past two months"
Barron's Cover: "Here Comes $75 Oil"
