OIL: Oil End of Day Summary: Crude Edges Down
Crude has edged down today, holding modest losses relatively steady through the day as the market weighs global oil demand risks. Both OPEC and the IEA have cut their demand forecasts.
- WTI MAY 25 down 0.3% at 61.36$/bbl
- EIA inventory forecast surveys: -468k bbl (bbg), +0.8m bbl (WSJ)
- The April IEA Oil Market Report revised global oil demand growth for 2025 down by 300 kb/d to 730 kb/d, as escalating trade tensions negatively impacted the economic outlook.
- US oil production will peak at 14m b/d in 2027, according to the EIA’s annual outlook.
- Bloomberg reports that the EU expects US 'reciprocal' tariffs to remain in place as talks between the two sides have made little progress.
- Keystone operator South Bow has resumed operation at reduced pressure, US regulator PHMSA said. Reduced pressure to remain until confident to resume normal operations.
- The rebound in Chinese crude oil imports in March may have been a one-off, according to a Commerzbank note cited by MT Newswires.
- PDVSA may have completed discharging oil from a tanker it ordered Chevron to return last week amid payment uncertainty related to US sanctions, according to Bloomberg and Reuters reports.
- HSBC has lowered its Brent price forecast to $68.5/bbl for 2025 and $65/bbl for 2026, citing rising trade tensions and an expected reduction in global oil demand, Reuters reports.
- Energy Aspects cuts the 2025 oil price forecast by $10/bbl to $67/bbl with a fairly imminent global recession as US tariffs roil the world economy, Bloomberg said.
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FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
