The Saudi's are using more oil than they are producing and they are going into the summer months where they consume the most amount of oil.   Oil is hovering around $50 brl - higher prices are on the horizon!!

England leaving the EU may put a damper on the outlook - time will tell.....

Saudi Arabia, a country nearly synonymous with plentiful crude supplies, is offering one of the strongest signs yet that the glut that has plagued the oil market since 2014 is coming to an end.

Despite near record production, the kingdom’s oil inventories have declined for six consecutive months, the longest stretch since the Joint Organisations Data Initiativestarted tracking Saudi supply levels nearly 15 years ago.

“The drop in Saudi crude stocks signals the rebalancing has started,” said Amrita Sen, chief oil analyst at consulting firm Energy Aspects Ltd. in London. “Crude stocks are coming off in places where either the data is opaque or the market isn’t paying as much attention.”

With oil traders focusing on supply changes in the U.S. and to a lesser extent in Europe and Japan, the drop in Saudi inventories has gone largely unnoticed. Since October, when Saudi supplies reached a record high, stocks have fallen by 38.6 million barrels as the kingdom provided more crude to the market than it pumped from its oilfields. Over the same period, U.S. crude stocks increased by nearly 61 million barrels.

“Saudi Arabia cannot continue to draw down stocks forever," said Olivier Jakob at consulting firm Petromatrix GmbH in Switzerland. With inventories down, Riyadh “will contribute to the rebalancing” of the oil market in the second half of the year and in 2017, he said.

http://www.bloomberg.com/news/articles/2016-06-23/oil-glut-is-fadin...