June 2018

Oil Outlook: Geopolitical Risks, Market Outlook and US Production

During our 2018 Global Energy Conference in New York City, we spoke to our commodities and energy strategy team about their outlook for the year ahead. From geopolitics to global demand, a number of factors affect our view of the global oil going forward.

Geopolitics: Countries to Watch

Oil is once again vulnerable to a price spike from geopolitics. Market pundits have held the belief that any oil price spike driven by geopolitics would be capped because short-cycle US production was waiting in the wings to fill any supply gap. But today, the oil market has tightened significantly in no small part due to the effectiveness of OPEC in draining bloated global inventories in addition to the healthy demand outlook. Helima Croft, our Global Head of Commodity Strategy, discusses Venezuela, Iran and other countries that could cause supply disruption in the global oil market from our Global Energy Conference in New York.

Oil Market Outlook and US Production

Looking at global oil demand, the storage surplus or the most bullish geopolitical arena in several years, our oil market view is one of measured optimism with significant potential for gap risk later in the year. Together with production bottlenecks in the US and Canada, we find a structural market you wouldn’t want to bet against in the next 6-12 months. Michael Tran, our Global Energy Strategist, provides his outlook for the oil market and insights on the impact of US production.