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CRUDE OIL

Crude oil gained last week on prospects of increased demand. Increase in refinery demand from major consumers, US and China, pushed prices to a 4-week high.

Crude oil rallied to 4-week highs on demand hopes

Crude oil prices in major platforms revived on prospects of rebounding demand. Refinery data major crude oil consuming nations, US and China, that shown recently signaled the recovering oil demand. In March, China’s refiners processed about 20% more crude than a year earlier, pointing to the strength of the country’s rebound.

OPEC expects global oil demand to grow by 6 Mb/d in 2021

Global oil demand in 2021 will grow by 6 million barrels per day to about 96.5 mb/d due to the global economic recovery and vaccinations, according to the April report from OPEC. Thus, the forecast for the growth of global demand has been increased by 100,000 bpd compared to the March report.

IEA ups oil demand forecast as vaccinations brighten outlook

Vaccine rollouts are brightening the outlook for global oil demand, the International Energy Agency (IEA) said in its monthly report last week, though rising cases in some major oil-consuming countries show a recovery may be fragile. Oil demand in 2021 is forecast to reach 96.7 mb/d, an increase of 5.7 mb/d from 2020.

OPEC+ deal compliance at 113% in March, Russia's compliance estimated at 95%

Participants of the OPEC+ deal to reduce oil production reached 113 percent compliance with their obligations in March, the International Energy Agency (IEA) said in its report. Compliance by OPEC countries was 124 percent and by non-OPEC countries it was 93 percent.

OPEC+ To Gradually Ease Production Cuts In May-July

Decisions on restoring oil production within OPEC+ have been made, and this will happen in May-July, Russian Deputy Prime Minister Alexander Novak said last week.

Money managers add net Longs in NYMEX Crude F&O

According to Commodity Futures Trading Commission (CFTC), the money managers increased bullish positions and bearish positions in US crude futures and option contracts last week. The net long positions in NYMEX crude F&O contracts increased.

US crude inventory

US EIA Crude stockpiles fell by 5.889 million barrels in the week ended 9 April. Distillate inventory, which included diesel and heating oil, fell by 2.083 million. At the same time gasoline stocks increased by 0.309 million barrels in the week. Refinery operated at 85 percent of total capacity.

Technical Outlook

Prices continue to stay firm on hopes of stronger demand outlook due to signs of economic recovery in the top consumers like US and China. Many of the large economies have reported a sharp rise in industrial and economic activities which expected to increase the demand for fuel later. Existing production policies of OPEC and U.S may also bring down global supply glut and balance the market. At the same time, the second wave of Covid 19 in many countries may limit sharp gains in the commodity.

NYMEX May:

Consistent trades above $64 would extend the bullish outlook towards $67 initially followed by $72 or more. Meanwhile, an unexpected drop below $57.20 would trigger weakness in the counter

MCX May: Prices required to break Rs 4850 to continue bullish outlook in the counter. Immediate trend reversal point is placed at Rs 4200.

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