CRUDE OIL (CLc1) ANALYSIS
- OPEC+ meeting
- Chinese PMI (MAR)
- Economic data announcements
CRUDE OIL FUNDAMENTAL BACKDROP
The Organization of the Petroleum Exporting Countries (OPEC) as well as their associated producers known as OPEC+ has been curbing output of recent in order to decrease oversupply in the market. Today OPEC+ will discuss this current trajectory which is expected to remain in place despite the United States imploring the group to consider the consumer perspective in terms of affordability.
Other crude price influencers this week have been the headlined blockage at the Suez Canal as well as the resurgent COVID-19 virus in major nations. These two factors have had a short-term impact on supply and demand. Although the Suez Canal is now fully operational, the COVID-19 situation may have longer lasting effects with diminished demand in the medium-term.
Chart prepared by Warren Venketas[1], Refinitiv
The strengthening U.S. Dollar[2] (green) has added additional pressure onto oil[3] prices as U.S. Treasury yields have ballooned which gives OPEC+ greater incentive to extend current restrictions, while an uptick in Chinese NBS Manufacturing PMI (white) for March to 51.9 is bullish for short-term crude oil prices.
The middle pane on the graph above shows the increase in crude oil stocks which may be offset by a potential rollover by OPEC+ to steady prices.
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CRUDE OIL ECONOMIC CALENDAR
Several key announcements are scheduled for this week with NFP[5] on Friday. U.S. Manufacturing PMI may have a greater effect on crude prices should actual figures deviate significantly from forecasts. Expect some dollar volatility pre and post-announcements which could have a knock-on effect on dollar based commodities.
