Oil prices have not escaped a wider risk-off move amid concerns over intense sales of US stocks and global growth. Ice Brent settled down just over 1.5% of the day. The somewhat bearish release from the International Energy Agency (IEA) was of little use.
In its latest monthly oil market report, the IEA highlights the risk that trade and tariff uncertainty will pose oil demand. The agency expects global oil demand to exceed just over 1 million b/d in 2025. The IEA has slightly revised its estimates of low demand growth for the fourth quarter of 2024 and first quarter of 2025. Other than OPEC+ supply, it is expected to increase by around 1.5MB/d this year, but OPEC+ supply will depend on what the group will do with supply cuts after April. The IEA predicts that the global oil market will have a 600k b/d surplus in 2025. If OPEC+ Unwind cuts the year, there is a risk that this will grow to 1m b/d.
The cracks in Ice Gasoil continue to be under pressure, trading at the lowest levels this year, under $17, below $17. Improved central distillation flow through the Suez Canal supported the low crack movement. However, given the gasoil stocks in Amsterdam, Rotterdam and Antwerp (ARA) have declined for five consecutive weeks, falling 95kt to 2.27MT last week, further weaknesses may be limited.
US natural gas storage fell more than expected last week. Energy Information Administration (EIA) data shows that the market expected 62 BCF of working storage has dropped by over 50bcf. Total storage is currently 11.9% below the five-year average. This release provided short-term support to the market. However, forecasts for warm weather in parts of the United States have made it short-lived.
