OK, long story short … Not yet says Merrills

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And … here’s the longer version (from a Merrill Lynch Research note for clients):

  • Investor index buying could provide some support in the next weeks, but physical oil supply is still outpacing demand
  • The term structure of oil continues to weaken and inventories keep piling up
  • This frames the stage for lower prices in 1Q15

To find a floor, we believe the oil market needs to see

  1. non-OPEC supply curtailments
  2. OPEC output cuts, or
  3. Stronger global demand

At the moment, none of these seem to be materializing. If anything, an impending buildup in floating storage (i.e. oil stored in vessels) could even impact the prospects of a 2H15 recovery