A commentary piece via ANZ on oil price movement overnight is a good summary of where market perceptions are at present.
In brief:
Crude oil prices struggled to break out of the recent trading range amid an uncertain outlook for the market.
- With pockets of strength interspersed with areas of weak demand, traders are struggling to get a handle on the global picture.
- Indian demand for gasoline continues to grow, with March consumption rising 27% y/y to a four month high of 88,380t/day. In the US, traffic is rising sharply as offices reopen, while pent up demand from travellers bodes well for the summer driving season. Even air travel is improving.
- However, the market is struggling to shrug off concerns of weak demand in regions such as Europe and South America.
Prices briefly jumped following reports of another attack on Saud Arabia oil facilities. Yemen's Houthis said they attacked an oil terminal near Jeddah with explosive laden drones.
- However, these attacks have rarely caused any disruption to supply, and prices subsequently gave back most of the gains over the course of the session.
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With ANZ highlighting the demand out of India in this piece it'll be interesting to keep an eye on demand there as COVID-19 cases continue their upward surge.
