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Matt Smith

Matt Smith

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

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Crude Oil Higher On Pre-Doha Hopes

Today is national ‘reach as high as you can’ day, and it feels like the oil market is getting into the spirit of things, pushing on to new two-month highs. After yesterday’s weekly inventory report distracted us (well, just a wee bit) from the impending Doha meeting, the IEA’s oil market report today has provided some food for thought. Hark, here are six things to consider relating to oil markets today:

1) The IEA’s monthly oil market report is in line with the demand forecasts from the OPEC and EIA in recent days. The IEA sees oil demand growth at the same level as its peers, +1.2 million barrels per day; this has been revised lower due to fears of slowing demand growth in China, the U.S. and Europe (the other two pointed to economic weakness in Latin America instead).

2) In contrast to the EIA, the IEA sees the market balancing later in the year, as demand growth remains steady, and non-OPEC supply (read: U.S. output) falls. Related: Why Low Oil Prices Haven’t Helped The Economy

The EIA, however, doesn’t see the global market rebalancing until the latter half of next year. It expects global inventories to build by an average of 1.4mn bpd in 2016, and to grow by 0.4 million bpd next year:

(Click to enlarge)

3) Onto the economic data front, and the Eurozone CPI print has clung on to the edge of inflation like the ledge of a tall building. With all paths leading back to energy, falling fuel prices were again a major factor last month, meaning that year-on-year it was unable to grapple its way into inflationary terrain:

(Click to enlarge)

Eurozone inflation YoY (source: investing.com)

4) There has been little else out of note data-wise except for the U.S.. The US also saw inflation data released, with it looking subdued across the board once again – providing no ammo for the Fed in their rate hike ambitions. Related: End Of An Era: Peabody Declares Bankruptcy

As for weekly jobless claims, they tied the lowest level of claims since 1973 at 253,000 – an historic feat:

(Click to enlarge)

Initial Jobless Claims (source: investing.com)

5) We highlighted last month how a force majeure on Nigeria’s Forcados blend was likely to limit crude exports into May. This is showing up in our ClipperData, just as it is in OPEC’s data, with Nigerian production down 133,000 bpd over the last two months.

Forcados exports have averaged 286,000 bpd since the beginning of last year, accounting for 15 percent of total Nigerian crude oil exports. Our ClipperData show that loadings of Forcados have dropped right off in March. Correspondingly, total Nigerian crude loadings are down to their lowest level since 2013: Related: Why India Matters More For Oil Than China

(Click to enlarge)

6) Don’t forget, it’s a big night tonight in terms of Chinese economic data, with GDP, industrial production and retail sales.

By Matt Smith

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