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US EIA raises 2019 and 2020 US oil production estimates

  
Analysis, Crude

Latest forecasts

The EIA sees 2019 oil output at 12.39 million barrels per day, up from 12.30 mbpd in the prior forecast. For 2020, they now see 13.1 mbpd compared to 13.03 mbpd previously.
All the indications I’m seeing are for slower investment in US production so I’m not really on board with this but we’re talking about some very small changes here. WTI has been steady since the release and is down 34-cents to $64.05 on the day.

Russia’s Dmitriev: OPEC+ could decide to raise oil output at June meeting

  
Analysis, Crude

Russia and Saudi Arabia are shooting from two different angles

OPEC
  • Market situation is improving, stocks are falling though
  • Output increase would not mean end of OPEC+ oil market coordination
Kirill Dmitriev is one of the main architects of Russia’s agreement with OPEC, so for him to come out and say this it could have some weight on the discussion in May/June. Do take note that his previous stance was that it was too early to comment on exiting production cuts, whereas now he’s talking about increasing production instead.
As mentioned earlier, Russia basically only has one foot in the circle when it comes to working with OPEC at the moment so it’s not too surprising to see them to make such remarks. But it isn’t going to be something that oil prices will like if such sentiment starts to gain more traction in the coming weeks.

Saudi oil minister says OPEC+ commitment to reducing inventories remain unchanged

  
Analysis, Crude

Comments by Saudi oil minister, Khalid Al-Falih

  • Venezuela, Iran sanctions waivers have an impact on markets
  • OPEC+ to hold ‘key meeting’ in May
  • Premature to say that OPEC+ has consensus to extend output cuts
As the April meeting has been cancelled, OPEC+ will be hosting its next JMMC meeting in May and will be discussing on whether or not to extend output cuts beyond the summer. With Russia only having one foot in the circle, I wouldn’t be surprised if they do reach a deal to extend said cuts until the end of the year.
Oil remains buoyed on the day, with Brent rising comfortably above the $70 handle at the moment following tensions seen in Libya.

Crucial Update : US Dollar Index ,Euro ,Yen ,GBP ,INR ,CAD ,AUD ,PESO ,OIL ,US Yields ,SPX ,Nasdaq Composite -Anirudh Sethi

  
Analysis, Crude, Forex, US Market
The US dollar remained firm last week.   The strongest of the majors was the Norwegian krone, and it rose less than 0.2% against the greenback.   The volatility is continuing to compress.  The one-month euro and yen implied volatility is a little below 5%, which puts it at five-year lows.   Another important characteristic of the foreign exchange market is that speculators are long dollars, which in the futures market is expressed as short the currency contracts.  Non-commercials (speculators) are net short all the major currency pairs.  The speculative net short position is the largest since 2016.  They are net short the most yen contracts in three months and the most Australian dollars contracts in five months.
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WTI crude nears the 200-day moving average

  
Analysis, Crude

Oil at the highest since November

Crude continues its 2019 run. it was up more than 35% in Q1 and has started off Q2 with a $0.94 rally to $61.08. That’s the best level since November 12.
Technically, oil is now comfortably in the 50%-61.8% retracement zone of the Q4 rout. The next major level to watch is $61.69, which is the 200-day moving average. Beyond that it’s the 61.8% level at $63.71.
Oil at the highest since November
Fundamentally, I’m increasingly convinced that Saudi Arabia isn’t messing around. Exports to the US are dropping fast and inventories are tightening up. OPEC production in Feb was the lowest since 2015 in a 280K bped drop in the month. The cartel is now tracking at 135% of pledged cuts and Trump’s rhetoric doesn’t seem to be having any effect.
For me, it’s increasingly clear that Saudi Arabia felt burned by the Iran waivers and isn’t going to get burned again. They want to see Brent at at least $70 and as high as $80.

Crucial Update :Dollar Index ,Euro ,Yen ,GBP ,AUD ,INR ,CAD ,CRUDE ,SPX ,DJIA ,NASDAQ COMPOSITE ,FAANG Stocks -Anirudh Sethi

  
Analysis, Crude, Forex
The US dollar rose against most of the major currencies in the last week of March.  The stronger than expected January GDP (0.3%) helped lift the Canadian dollar (~0.6%), which was the notable exception.  The Australian dollar’s rise ahead of the weekend and the end of Q4 allowed it to secure a small gain for the week (~0.2%).
The risk that the UK leaves the EU without a deal seemed to many to have increased after a majority of the House of Commons failed to back any alternative, including the Withdrawal Bill for the third (and possibly not the last) time.   This saw sterling briefly trade below $1.30.  We still think a longer extension the leads to a softer and later UK exit will eventually be negotiated and that this will be seen as sterling positive.   The Reserve Bank of New Zealand confirmed what many market participants had suspected, namely that the next move in rates is probably a cut.  This sent the New Zealand dollar lower, and after sterling’s 1.3% decline, its 1.1% decline was the second largest among the major currencies.  Around $0.6800, it is in the middle of the two-cent range that that largely confined it in Q1.
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Oil falls after Trump says OPEC should increase the flow of crude

  
Analysis, Crude

WTI now down $1 on the day

WTI now down $1 on the day
WTI crude is down $1.00 to $58.41. It hit a session low of $58.20 after Trump tweeted that OPEC should pump more.
Trump tweetI don’t know how serious this is and the rebound in oil says it’s not a big deal. There is the NOPEC legislation to contend with and that would be a mess.
A widely held belief among traders is that OPEC increased pumping in Q3 of 2018 in anticipation of heavy curbs against Iran with Saudi Arabia running as aggressively as they could. But Trump pulled the bait-and-switch and gave Iran waivers, thus kneecapping oil and gasoline prices ahead of the midterms. Saudi Arabia won’t be fooled again.

An Update :US Dollar Index ,Euro ,INR ,YEN ,GBP ,CAD ,AUD ,CRUDE ,GOLD ,SILVER ,DJIA ,SPX ,Nasdaq Composite -Anirudh Sethi

  
Analysis, Crude, Forex, Global Indices, Gold / Silver
The Federal Reserve was more dovish than expected, but that did not stop the dollar from appreciating against most of the major currencies last week.  Even the Norwegian krone, which one would have thought would have been better supported following the central bank’s rate hike, closed lower on the week. Among the majors, the yen and Swiss franc were resilient in the face of the dollar’s strength.
The dollar also rose against many of the high-beta emerging market currencies, like the Turkish lira, the South African rand, the Hungarian forint, and Argentina’s peso.   The Mexican peso was an exception.  It had rallied nearly 1.8% until surrendering 2/3 ahead of the weekend, managing to close 0.6% stronger.  The Indian rupee gained for the fifth consecutive week, but the momentum appears to be fading, setting the stage for a near-term pullback.  The Hong Kong Monetary Authority intervened last week to further weakness, and helped by the fall in US yields, saw some success by the end of the week.  The Hong Kong dollar gained 0.03% against the US dollar last week.
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Oil traders are now watching mobile phone traffic at refineries

  
Analysis, Crude

Bloomberg looks at how far oil traders will take it

During hurricane season last year, oil traders were renting boats and counting the tankers arriving and departing Houston. For years, they have been using satellite technology to estimate stockpiles.
The latest scheme is using geolocation data from mobile apps to track worker traffic in refineries in an attempt to identify problems, accidents and maintenance.
“The ability to sharpen a view, or to really gain an edge, based not on anecdotal but more statistically significant signals, is extremely advantageous,” Tran said in an interview. “There is an information asymmetry in this market.”
It starts in oil but soon big data is going to overwhelm economic data in tracking trends in everything.
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