OPEC+ Holds Steady with Global Oil Demand Forecast
June 11, 2021
The market sold off hard midday as the news was reported that the US had lifted the sanctions on Iranian oil. The selloff was very brief as it was clarified that only one Iranian oil official had been removed from the sanctions list.
Crude oil and refined fuels products recovered and rallied to 2-year highs on the optimism for strong economic demand after the US unemployment claims fell to their lowest level since the start of the pandemic in March 2020.
Also supportive to prices was the fact the OPEC+ kept their world oil demand forecast unchanged from last month with oil demand expected to rise by 6.6% or 5.95 million bpd this year.
According to Reuters calculations based on data from oil analytics firm Vortexa, traders loaded about 3.8 million barrels of gasoline and blending components from Asia, mainly South Korea and India, bound for the United States in May, up more than 51% on the month.
May CPI came in at up .6% against the expectation of up .5%. This takes the year on year up to 5%. That is the highest level since August 2008. Core CPI (ex- food and energy) was up .7% against the expectation of up .5%. This takes the core CPI year on year to up 3.8%. That is the highest since January 1992. The inflation picture is warming up and there is a big debate as to whether this inflation is permanent or transitory. The higher than expected inflation data added support to crude prices.