• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 7 hours WE have a suicidal player in the energy industry
  • 12 hours Washington doctor removed from his post, over covid
  • 39 mins The Most Annoying Person You Have Encountered During Lockdown
  • 5 hours Real Death Toll In CCP Virus May Be 12X Official Toll
  • 5 hours TRUMP pushing Hydroxychloroquine + Zpak therapy forward despite FDA conservative approach. As he reasons, "What have we got to lose ?"
  • 2 hours How to Create a Pandemic
  • 13 hours Which producers will shut in first?
  • 3 hours Saudi Aramco struggling to raise money for this year's dividend of $75 billion. Now trying to sell their pipelines for $10 billion.
  • 11 hours Shale Legs
  • 11 hours KSA taking Missiles from ?
  • 1 hour Death Match: Climate Change vs. Coronavirus
  • 17 hours Trump eyes massive expulsion of suspected Chinese spies
Alt Text

Oil Stocks Haven’t Hit The Bottom Just Yet

The coronavirus pandemic, in addition…

Alt Text

An Oilman’s Plea To President Trump

Oil markets are reeling from…

Alt Text

How COVID-19 Could Spark The Next Recession

The COVID-19 crisis is wreaking…

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 Rally Pauses After Strong Gains

Two hundred and forty-six years after the birth of William Wordsworth, and the oil prices today are wandering lower (as lonely as a cloud) after yesterday’s inventory-draw sponsored rally. Hark, here are five things to consider relating to energy markets today:

1) Economic data has been light overnight; we’ve had positive house price data out of the UK, a deteriorating French trade deficit, and below-par Spanish industrial production. Weekly jobless claims are the main economic release of note in the U.S.; they have come in at 267.000, marking the longest streak below 300.000 since 1973 (think: Enter The Dragon, Live and Let Die).

2) Good things come in threes, and China affirms this as its foreign exchange reserves increased last month, following positive manufacturing and services data in recent days. Chinese FX reserves stopped the rot in March, increasing slightly after sliding for four consecutive months. Reserves fell $600 billion last year; they peaked at $4 trillion in mid-2014, and now currently reside at $3.212 trillion. Related: Why Oil Prices Will Rise And Many Pundits Will Be Caught By Surprise

3) Angola is the latest of the petro-states to show signs of its economy unraveling. Angola relies on oil for some 95 percent of its export earnings (reminiscent of Venezuela), and for more than half of its government revenue. Hence given the slump in oil prices, Angola is having to turn to the IMF for a bailout as it has run out of money to pay for basic services such as trash collection.

Angola has relied heavily on Chinese investment in recent years, exchanging its oil for infrastructure projects. As Angola’s debt increases, it is having to send more oil to China to service its debt payments. As illustrated by our ClipperData below, China is the number one destination for Angola’s crude flows. Since the beginning of 2014, China has accounted for 43 percent of all Angola’s crude exports – a dominant trend which will likely continue:

(Click to enlarge)

4) Venezuela is faring little better. Amid rolling blackouts due to a strained power grid, President Maduro has declared every Friday a holiday to save electricity. The recent El Nino weather system has caused an extreme drought, draining the Guri Dam, which supplies as much as 75 percent of the power consumed in Caracas. Venezuela is currently ranked as the world’s most miserable economy on the Misery Index. Related: How The Ocean Can Help Predict Electricity Prices

5) Finally, we get the natural gas storage report today, and as spring abounds (and Texas temperatures charge towards 90 degrees Fahrenheit), it’s fair to assume that the winter withdrawal season is behind us, with an 8 Bcf injection expected to storage today (which compares to last year’s +6 Bcf, the five-year average of -19 Bcf). This would put us above 2012’s record of 2,472 Bcf at the end of March. Storage currently sits over 40 percent higher than last year’s level, 34 percent above the five-year average.

(Click to enlarge)

By Matt Smith

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News