Via Energy and

An insightful graphic from Goldman Sachs Investment Research which highlights the recent evolution of the global crude oil supply-demand balance and where it's projected to go over the next 15 months:



The market is currently oversupplied by nearly 2 million barrels per day, however, this oversupply is projected to turn into a small deficit by the end of 2016 as supply tapers off a bit while demand continues to trend higher.

The most underestimated oil supply story of the past couple years is definitely Iraq. We hear about ISIS virtually every day, yet the Iraqi government has done an admirable job of keeping the oil infrastructure secure. The increase in Iraqi oil production during the past couple of years accounts for nearly all of the current global crude oil oversupply:



As a result of a near perfect storm of factors the global crude oil supply-demand balance has swung to relatively extreme oversupply during 2015. The one constant in commodities markets is that supply-demand imbalances will always work themselves out through price. The sharp decline in the crude oil price during the last year has ensured that the current oversupply is well on its way to correcting itself.