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ICYMI – OPEC still optimistic on oil demand despite India severe coronavirus ‘challenges’

  
Analysis, Crude

The Organization of the Petroleum Exporting Countries (OPEC) released its monthly report on Tuesday.

  • It left its prediction of a strong recovery for global world oil demand in 2021 intact.
  • Said growth in the US & China will counter the demand slump in India
Said demand will rise by 5.95 million barrels per day (bpd) in 2021 (i.e. +6.6%), a forecast that is unchanged from last month.
The report also noted:
  • significant uncertainties surrounding the pandemic
  • “India is currently facing severe COVID-19-related challenges …  face a negative impact on its recovery in the second quarter …. is expected to continue improving its momentum again in the second half of 2021”
  • OPEC forecasts 2021 world economic growth at 5.5% (from 5.4% projected in the previous month’s report)

Oil continues stellar advance this week, eyes March highs

  
Analysis, Crude

WTI up 1.3% on the day to $66.50 currently

WTI D1 05-05
Buyers continue to ride the uptrend in oil and this reaffirms the more bullish sentiment in the commodity, as price now eyes the March highs with Brent also closing in on $70.
WTI is up 1.3% to $66.50 and treading water above daily resistance at $66.37 with the March high @ $67.94 one to keep an eye out for as the topside run extends.
The April 2019 high @ $66.58 is also one to watch on the daily as oil buyers look to contest an extended breakout after having consolidated since mid-March.

WTI crude oil futures settle at $64.49

  
Analysis, Crude

WTI crude oil futures up $0.91 1.43%

the price of WTI crude oil futures are settling higher on the day on hopes for reopening and stronger global growth. The price settle up $0.91 or 1.43% at $64.49. The high for the day reach $64.68. The low for the day extended to $62.91
WTI crude oil futures up $0.91 1.43%_
Looking at the hourly chart, the price there is closing above its 100 hour moving average currently at $63.81. The price is also closing above the March 20 high at $64.36.  Stay above the 100 hour moving average is a key barometer for the buyers.

Oil – US, UK, China demand all improving

  
Analysis, Crude

Summary notes on crude via ANZ, noting that further strength in demand continue to emerge

On the positive side:
  • emergence of several US cities from lockdown
  • stronger demand in gasoline ahead of the key US summer driving season
  • In Europe, UK’s road fuel sales are nearing last summer’s levels
  • Sales for air travel, hotels and car rentals are selling out in China ahead of its Labour Day holiday
  • oil market has also been caught up in the broader rally across commodity markets as the recovery across key economies picks up
& not so positive:
  • renewed optimism is overshadowing headwinds in India, where a second wave of infections of COVID-19 are resulting in new travel restrictions being put in place
  • Demand in Japan and Brazil is also likely to be hit by a surge in infections and new restrictions
Summary notes on crude via ANZ, noting that further strength in demand continue to emerge

EIA US weekly oil inventories +90K vs -450K expected

  
Analysis, Crude

Weekly oil inventory data

  • Prior was +594K
  • Gasoline +92K vs -50K expected
  • Distillates -3342K vs -1244K expected
  • Refinery utilization +0.40% vs +0.25% expected
  • Production estimate  10.9 mbpd vs 10.9 mbpd prior
API data from late yesterday:
  • Crude +4319K
  • Gasoline -1288K
  • Distillates -2417K
WTI has been on the move to the upside in the last two days. It’s up $1.05 to $64.01 today.

Goldman Sachs says Oil is going to $80/bbl due to largest demand surge

  
Analysis, Crude

Goldman Sachs on oil and commodities:

  • Commodities will rally 13.5% in the next six months
  • oil to $80/bbl , global consumption will surge 5.2m b/d over the next six months, which is 50% larger than the next biggest increase over that timeframe since 2000 … “The magnitude of the coming change in the volume of demand — a change which supply cannot match — must not be understated”
  • copper to $11,000/ton
  • commodity markets have looked through the sharp rise in Covid-19 cases in India
GS forecast greater mobility, citing:
  • aided by vaccines,
  • a seasonal upswing in transportation, manufacturing and construction, beginning now and accelerating into June
  • pace of vaccination accelerates in Europe, increased travel demand will result
  • easing of international travel curbs in May
GS comments come via Bloomberg

OPEC+ ministers won’t meet with JMMC set to recommend no production changes

  
Analysis, Crude

OPEC+ won’t bother with formality

There was some speculation that OPEC could slow its return to production but even with demand slowing in India and Japan, it’s holding up better than anticipated and accelerating in the US.
The next meeting will be in early June.
WTI touched a session high at $62.84 a short time ago in a spike but it’s back to $62.49, up about 1% on the day.
Update: Reuters reports, citing a source, that the preference is to keep output plans along existing lines.
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