• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 10 mins EU has already lost the Trump vs. EU Trade War
  • 8 hours Impeachment S**te
  • 2 days Science: Only correct if it fits the popular narrative
  • 15 hours 55.00 WTI
  • 2 hours More dumbed down? re Hong Kong Act of Congress
  • 2 hours Article: Did Exxon only make $39 Million onshore U.S. last quarter ?
  • 2 days IEA predicts oil demand will grow annually at 1 million barrels a day for the next 5 years
  • 2 days Crazy Stories From Round The World
  • 45 mins U.S. Shale To Break Records Despite Bearish Rhetoric
  • 22 hours Everything You Need To Know About Trump
  • 14 hours Visualizing Pennsylvania Oil & Gas Production (Through September 2019)
  • 3 mins Pope Proposes New Sin: Thou Shalt Not Destroy The Harmony Of The Environment
  • 17 hours Water, Trump, and Israel’s National Security
  • 2 days ‘If it saves a life’: Power cut to 1.5 million Californians
  • 2 days Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
Alt Text

Aramco Reveals Its Valuation

Aramco will sell the first…

Alt Text

The Top 5 Ways We Use Oil & Gas

Oil & gas products are…

Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Premium Content

Crude Crashes As Traders Doubt Outcome Of Doha

Two hundred and thirty-two years after the first balloon ride in Ireland, and the crude market is looking deflated ahead of the Doha meeting on Sunday (…ministers have run out of hot air it seems…). As we move across the tipping point of the month toward May, here are six things to consider in oil markets today:

1) Jumping straight into the overnight economic data, Chinese numbers were on the whole pretty good. GDP for Q1 was smack dab in line with consensus (convenient?), showing +6.7 percent growth YoY. As for industrial production and retail sales, both were better than expected; industrial production rebounded strongly to 6.8 percent YoY, while retail sales edged higher to 10.5 percent YoY. These numbers give some tentative hope that ongoing stimulus measures are gaining some traction:

(Click to enlarge)

2) A key release from a crude perspective in the U.S. today has been industrial production. Once again, it has been disappointing, down 0.6 percent in March on the month prior, and now down on a year-over-year basis for seven consecutive months. This is a red flag for both the broader economy and energy demand going forward; no wonder distillate demand is so weak, down 7 percent year-on-year…

(Click to enlarge)

Source: tradingeconomics.com

3) The chart below is pilfered from this piece by Art Berman. It highlights the persistent nature of global oversupply, despite falling U.S. oil production. It illustrates how the global market last month was oversupplied by 1.45 million barrels per day, an increase of 270,000 bpd on the prior month:

(Click to enlarge)

4) We highlighted yesterday how the EIA projects 1.4 million bpd will be added to inventories on average this year, with an additional 0.4 million bpd in 2017. This is very much in contrast to the IEA projection, which sees the global oil surplus dramatically narrowing in the latter half of the year.

Given the two agencies agree that demand growth will average 1.2 million bpd this year, the divergence betwixt the two is therefore driven by supply-side expectations. The IEA expects a more significant drop in non-OPEC supply (and specifically U.S. production) while it expects the return of Iranian barrels to the market to be ‘more measured’.

(Click to enlarge)

5) The below chart is from Rystad Energy, with its projection for oil demand growth for this year. We had the triumvirate of reports from the EIA, IEA and OPEC this week, all singing from the same hymn-sheet, projecting demand growth at 1.2 million barrels per day this year.

Rystad sees demand growth at a lesser 1 million bpd, with China, India and Saudi Arabia leading the charge. It expects these three will account for 60 percent, or 600,000 bpd, of total demand growth. Expectations for stronger Indian oil demand growth continue to grow.

(Click to enlarge)

6) Finally, this week’s OPEC report highlighted ‘renewed U.S. buying interest in West African light sweet grades‘ as the Brent-WTI spread narrowed in March. We see in our ClipperData that imports to the East Coast – where West African crude predominantly heads – were up nearly 20 percent in Q1 versus last year’s volume.

As the economics of crude-by-rail from Bakken remain unfavorable, East Coast refiners are instead turning to imports from both Latin America and West Africa. Even though total U.S. imports from West Africa dropped last month, OPEC is indeed right that light sweet grades increased: 225,000 bpd of receipts were light sweet barrels in March, compared to 129,000 bpd in the month prior.

(Click to enlarge)

By Matt Smith

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Peacefulwarrior on April 15 2016 said:
    It would seem at some point in the Zero Sum game for global market share that the losses will eventually begin to matter. At this point on the Pain chart, there is either some rational thought and an invisible supply/demand hand to reset pricing or there is potential for World War. The longer insanity reigns, the greater the opportunity for a binary event.
  • kamakiri on April 15 2016 said:
    Crude goes from $26 to $42...and back down to $40.4 is 'crashing'?

    Or more recently goes from $35 to $42.42...and $2 of retrace is 'crashing'?

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play