By Matt Smith
March 21, 2017 - 12:41 PM CDT
Crude prices are coming under selling pressure once again, as oversupply concerns dwarf OPEC production cut expectations. As equity markets join oil prices in charging lower, hark, here are six things to consider in oil markets today.
1) In in the aftermath of the OPEC production cut, Middle East producers have chosen to keep Asian customers well supplied, by swinging their exports east of the Suez. This is illustrated in our ClipperData below, which shows January loadings bound for Asia from Saudi Arabia and Iraq were nearly 800,000 bpd higher than October's reference level, while flows heading west of Suez to North America were up just 50,000 bpd.
This has flipped in March, however, with loadings bound for North America rising nearly 800,000 bpd versus October's benchmark, while loadings bound for Asia are down nearly 300,000 bpd. We have said before that China is such a big market participant that it 'makes the weather' - dictating global flows - and it appears to be doing so again.
China's demand for Saudi and Iraqi crude was primarily the driver behind the spike in crude loadings to Asia in January; its waning appetite in March has given way to Middle East loadings swinging west once more.