The Commodities Feed: OPEC sees stronger oil demand in 2H21
Yesterday, crude oil costs negotiated strongly on wholesome gasoline demand in america and a usually constructive OPEC report. The group now expects international oil demand to extend by 5.89 million barrels / d in 2021 from its estimate final month of 5.79 million barrels / d. OPEC expects the restoration in demand to be a lot stronger within the second half of 2021, as vaccines are actually extensively accessible and administered. Ongoing foreclosures measures in Europe might proceed to weigh on demand within the close to time period. The group additionally revised upward its demand estimates for 2020 and stated demand might have fallen by 9.60 MMbbls / d final 12 months, in comparison with its earlier estimate of 9.72 MMbbls / d.
For the quick time period, OPEC lowered its international demand estimates for 2Q21 by round 310 Mb / d, whereas rising provide estimates for non-OPEC members within the quarter from 370 Mb / d. Consequently, OPEC’s international crude wants have been revised downward from 690 Mb / d to 27.4 Mb / d for the second quarter. Falling demand for OPEC crude might stop the group from additional easing manufacturing cuts within the subsequent few months at the least. Earlier this month, OPEC + left its manufacturing targets largely unchanged for April, apart from marginal will increase for Russia and Kazakhstan.
Lastly, withdrawals from pure gasoline inventories in america remained low final week as temperatures rose within the Northeast, weighing on heating demand. The EIA reported a web withdrawal of 52 billion cubic ft of pure gasoline final week from the 5-year common of 89 billion cubic ft for a similar week and market expectations for 78 billion cubic ft of withdrawal, based on a BBG survey. Pure gasoline inventories in america are actually 141 billion cubic ft beneath the 5-year common for this level within the season.
Metals markets have adopted the rally in threat property and seem to have had a double increase on the macro entrance. In america, Biden will signal the US $ 1.9 trillion Covid-19 stimulus package deal on Thursday, a day forward of schedule, whereas the European Central Financial institution has additionally pledged to step up the tempo of its relaunch.
In mining provide, Peru’s copper manufacturing fell 7.6% year-on-year to 176.4 kt in January after posting robust manufacturing figures within the fourth quarter of final 12 months. Nevertheless, the nation expects its copper manufacturing ranges and complete output to select as much as 2.5 million tonnes this 12 months. Amongst different metals, zinc manufacturing fell 3.5% yoy to 121.6 kt, whereas lead manufacturing fell 13% yoy to 21 kt final month. The general decline in copper and zinc was primarily attributable to decrease manufacturing ranges on the Antamina mine.
As for China, the current repression of air pollution continues to shake the iron markets. Pushed by tight controls and a few manufacturing cutbacks by factories, metal markets have remained vibrant attributable to restricted provide. The demand for metal is anticipated to develop over the following few months, in keeping with the seasonal pattern. Shanghai rebar costs jumped greater than 2% in at this time’s Asian classes. Clearly, the current transfer put strain on demand for iron ore, inflicting the market to be whipped up by manufacturing cuts on the Tangshan factories. Not like excessive metal costs, Singapore iron ore futures costs fell beneath US $ 160 / t within the Asian classes.
CBOT corn and soy traded positively yesterday on wholesome exports from the US and the downward revision of provide from Argentina. USDA reported that web corn gross sales rose sharply to 683 kt over the previous week from market expectations of round 593 kt, based on a Bloomberg survey and precise gross sales of 155 kt every week earlier. . The company additionally reported soybean gross sales of 564 kt prior to now week, towards market expectations of 460 kt with China main the best way.
In the meantime, Argentina’s Buenos Aires grain alternate lowered its soybean provide estimates from 46 to 44 million tonnes for 2020/21 attributable to sizzling, dry climate within the nation; Argentina provided 49 tonnes of soybeans in 2019/20. The alternate additionally downgraded its maize manufacturing estimates to 45 million tonnes from estimates of 46 million tonnes made final week and 51.5 million tonnes of manufacturing final 12 months.
However, CONAB of Brazil elevated its maize manufacturing estimates from 105.5 to 108.1 million tonnes for advertising and marketing 12 months 2020/21, primarily over a bigger space. The Company additionally revised upward its soybean manufacturing estimates from 133.8 to 135.1 tonnes (+ 8.2% over one 12 months) attributable to the next space (+ 4.1% over a 12 months). 12 months) and higher returns (+ 4% over one 12 months) in comparison with final 12 months.