Friday April 19, 2019
1. China’s oil demand remains robust
- The bearish case for crude oil this year largely comes down to softening demand, particularly in China.
- However, China has defied expectations of an economic deceleration. China just posted strong GDP figures, as well as strong crude demand.
- In March, China’s refineries processed an average of 12.5 mb/d, which surprised on the upside. “Though this was somewhat less than the record-high levels achieved in January and February, the significantly lower crude oil imports in March had suggested a lower rate of crude oil processing,” Commerzbank wrote in a note. “The level in March was still extremely high, and was up by 3% year-on-year. Chinese refineries turned a record-high 12.6 million barrels per day into oil products in the first quarter.”
- Strong Chinese demand significantly decreases the odds that global oil demand disappoints.
2. Silver prices low
- Silver prices have fallen sharply over the past month, owing to high stocks.
- But demand could pick up if the U.S.-China trade war eases. Still, prices may not rebound significantly until later this year, according to Standard Chartered.
- “Supply declined in 2018 driven by lower output in the US, Peru and Canada while demand edged higher as jewellery demand growth offset softer industrial demand,” Standard Chartered wrote in a note. “We expect…