Market Oversupplied

The International Energy Agency (IEA) reports in the latest monthly oil market analysis that "The market's ability to absorb that oversupply is unlikely to last. Onshore storage space is limited. So is the tanker fleet. New refineries do not get built every day. Something has to give." The futures market indicate that buyers of Brent and WTI crude are willing to pay less than 45 cents per barrel per month to finance and store crude for the remainder of the year. The summer's strong demand for gasoline in the U.S. and refinery start-ups have kept prices higher and stocks lower than expected. IEA expects the market to continue to balance through 2016.