Sharp depreciation of emerging market currencies of Latin America and Asia has led to record price for imported Oil. According to Barclays, postponement of tapering will have a lagged positive positive effect on non-OECD consumption in H1 2014.The US Federal Reserve's decision to maintain status quo with stimulus measures and delay tapering will have the biggest impact on crude oil balances according to Barclays.
-Prices are expected to remain at current levles with an upward bias in September and Q4.
-OECD demand growth to support a tighter market balance.
-Surprise on stimulus comes at a time when spare capacity of producers have been stretched and relatively low crude and product stocks.
-US demand for Crude Oil has been driven by diesel rather than gasoline and cyclical factors of manufacturing, confidence and employment.
-Sharp depreciation of emerging market currencies of Latin America and Asia has led to record price for imported Oil. According to Barclays, postponement of tapering will have a lagged positive positive effect on non-OECD consumption in H1 2014.
-Brent crude to average $110 per barrel in 2014
-Fed decision to have a positive impact on emerging market currencies with higher current account deficit (CAD) as in India.
Source: Barclays