Setting Us Up For $200 Oil -- June 30, 2015

Well, well, well. Isn't this interesting?

Reuters is reporting:

Massive downward revisions to oil output in Brazil and Iraq have increased the risks for oil markets of going from the current feast to famine within just a few years, leading to a price spike that would give a new boost to the U.S. shale industry.

Brazil and Iraq had been expected to add over 2 million barrels per day to global supply by 2020 and another 2.5 million by 2025, becoming the two biggest contributors to help meet rising global demand, according to the long-term forecast of the International Energy Agency.

On the other hand, in the short term, OPEC is boosting supply. Reuters is reporting: OPEC Crude Production Surges as Iraq Pumps at Record Pace.

Iraqi crude production climbed to a record this month, helping send OPEC output to the highest level since August 2012.

Output by the Organization of Petroleum Exporting Countries climbed 744,000 barrels to 32.134 million a day this month. Last month’s total was revised 189,000 barrels lower to 31.39 million a day, because of changes to the Saudi, Iraqi, Algerian and Nigerian estimates.

Iraqi production rose 567,000 barrels a day to a record 4.388 million this month. Iraq, OPEC’s second-biggest producer, was responsible for more than half of the total gain this month.

Saudi Arabia, OPEC’s top producer, increased output by 150,000 barrels a day to 10.45 million in June, the most in monthly Bloomberg data going back to 1989. [This increase comes after a $35 billion, 5-year program to increase production. So, after announcing this $35 billion program, Saudi sets a record by increasing output by 150,000 bopd, from 10.30 million = a whopping 1.46% increase. Disclaimer holds.]

The kingdom exported more crude because of higher Asian demand.

Iranian production rose 50,000 barrels a day to 2.85 million this month, leaving output at the highest level since March 2014. The nation pumped more than 3.1 million barrels a day from 1991 until July 2012, when additional sanctions were imposed on the Islamic republic to curb its nuclear program.

Iran has estimated it could double exports from about 1 million barrels a day within six months of sanctions being lifted.

Remember: this is a survey of oil executives and analysts; it is a survey.

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Meanwhile, Platts is reporting:

China's apparent oil demand* in May increased 8.2% from a year earlier to an average 10.36 million barrels per day (bopd).

Apparent demand during the month was supported by healthy demand growth across all oil product categories.

China's refinery throughput in May averaged 10.38 million bopd, rising 7.4% from a year earlier. On the other hand, China was a net oil product exporter in May, with volumes totaling 120,000 mt.

During the first five months of this year, China's total apparent oil demand averaged 10.45 million b/d, an increase of 5.2% from the same period of 2014. This continues to be the fastest pace of year-to-date growth since 2011 and defies a relatively weak macroeconomic outlook.

"This was the fastest pace of growth since June 2013, when demand grew by 11.53%. Demand for all key products showed year-on-year increase in the month," said Platts Associate Editorial Director for Asia oil news, Mriganka Jaipuriyar.

And then this: look for huge car sales data tomorrow, including a "move away from smaller cars and a further move toward SUVs.