Crude oil price retreats following the strong rally yesterday. The front-month WTI contract slides to 85.4, down -0.51% from Wednesday's close, in European session.
In its monthly report in April, the OPEC made only mild changes in global oil demand/supply balance. The organization controlling the world's 40% oil exports anticipated demand will increase +0.9% y/y to 85.2 bpd in 2010, following a contraction to 84.4M bpd last year. While demand forecast was inline with previous projection, the OPEC expected non-OPEC supply will rise slightly to 51.5M bpd, thus lowering the needs of OPEC production.
The OPEC also reported the 12 members in the group produced 29.263Mbpd of crude oil last month, compared with 29.291M bpd in February. However, OPEC's production increased to 26.923M bpd from 26.74M bpd in February, further reducing the compliance to 52.9% (previous: 54.9%.
Gold edges lower as the euro plummets after EU's economy commissioner said that deficit problems in Greece, as well as periphery European countries, may trigger deflation around the 16-nation region Eurozone. Moreover, although EU's approval of a loan to Greece has boosted optimism for some days, the market indeed worried Greece would activate it to avoid a default. Even if Greece may weather the sovereign crisis after tapping the fund, it may not be able to solve the problem. Rather it may just help delay the problem.
Concerning macroeconomic development, the market continues to anticipate strong data from the US. Initial jobless claims probably dropped to 440K in the week ended April 10 from 460K in the prior week. Empire State Manufacturing Index is expected to have improved to 24 in Arpil while industrial production should have gained +0.7% m/m in March.
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