Supply is still clearly very strong and easily outpacing lackluster demand, with the surplus necessarily being pushed into storage. But that is where the clarity of key short-term trends ends. A growing consensus has rebalancing under way and expected to pick up speed in the second half of the year. But US forecasters are much less willing to take that line, as they see more price resiliency from US shale producers, which effectively pushes any recovery in balances and prices into 2016. January balances show a mas-sive 3.7 million barrel per day supply surplus. Much of that is finding its way into storage. But is enough storage available? Tanks are filling up in the US and Europe. Up to 70 million bbl of vessel capacity has been booked for long-term use with an option to store — and some 20 million bbl might already be floating. Continued surpluses in the second half of the year, as shown in the table below, suggest the rebalancing that Opec has hoped for will move into 2016 (pi4).
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