• Oil prices strengthened in July, reflecting heightened concerns over the security of supply with the violent unrest in Egypt, an uptick in Asian crude demand due to improved margins, as well as ramped up refinery runs and tight supply. More recently, the step-up in military action threat by the US on Syria on its alleged use of chemical weapons has provided further impetus to prices.
• The Brent-WTI differential narrowed significantly in July to an average of US$3/barrel, the lowest level since January 2011, as expanded takeaway capacity from Cushing and high refinery crude runs drove down inventory levels at a record rate in July.
• We remain relatively optimistic about the outlook for oil prices. The impact of stronger global demand on prices is expected to outweigh the effect of improving supply-side factors over 2013, even when taking into consideration the likelihood of tightened supply from the Middle East.

For further analysis download the full report.

• Oil Market Update – August 2013 (PDF 260 KB)