OPEC Monthly Oil Market Report - April 2008

OPEC Monthly Oil Market Report - April 2008 - OPEC...

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April 2008 Feature Article: Recent crude oil price volatility Oil market highlights Feature article Crude oil price movements The oil futures market Commodity markets Highlights of the world economy World oil demand World oil supply Product markets and refinery operations The tanker market Oil trade Stock movements Balance of supply and demand 1 3 5 9 11 15 20 27 34 38 41 45 48 OPEC Organization of the Petroleum Exporting Countries Monthly Oi lM arket Report ObereDonaustrasse 93, A-1020 Vienna, Austria Tel +431 21112 Fax +431 2164320 E-mail: [email protected] Web site: www.opec.org
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____________________________________________________________________ Monthly Oil Market Report April 2008 1 Oil Market Highlights ± US dollar weakness against major currencies inspired increased investment in the commodities market, particularly for crude, pushing prices to record levels. Concern that economic growth could dent oil demand kept prices volatile. Geopolitical tensions in the Middle East added to market bullishness while weak economic indicators revived fears over a recession in the US, capping further price developments. The Basket averaged the month at $99.03/b for an increase of $8.39 or more than 9% from the previous month. The Basket rose in the first half of April, reaching a record high of $104.02/b on 14 April. ± Based on the newly updated purchasing power parity weights, world economic growth is forecast at 3.9% in 2008, representing a decline of 0.1% from the adjusted figures for the previous month. The US appears very likely to have fallen into recession in the first half of the year due to continued weakness in labour markets. Payrolls have declined for the third month, consumer confidence has fallen sharply and the contraction continues in the housing sector. While existing home sales are showing some signs of bottoming, new home sales fell in February to the lowest level in 13 years. Mortgage-related asset writedowns and losses reported by the world’s biggest financial institutions now exceed $230 bn. Total losses from the US mortgage crisis are expected to approach one trillion dollars, according to the IMF. Growth in the US has been revised down 0.2 percentage points to 1.1%, the Euro-zone 0.1 percentage points to 1.7% while Japanese growth is also down 0.1 percentage points to 1.3%. Chinese growth has been revised by 0.2 percentage points to 9.7% for 2008, while in India and Russia are forecast unchanged at 8.0% and 6.8%, respectively. ± Winter products did not see strong consumption growth in OECD due to the mild winter in the first quarter 2008. World oil demand has been showing healthy growth because of non-OECD demand. In the OECD and especially the US, transport fuel failed to grow as expected as a result of slow economic activities and higher oil prices. Growth in the Other OECD regions was not enough to offset the strong y-o-y decline in US oil demand in March. World oil demand is forecast to grow by 1.2 mb/d in 2008 to average 87.0 mb/d, broadly unchanged from last month. Non-OECD oil demand — mainly from China, the Middle East, India and Latin America — is forecast to be strong, which is estimated to offset the weak OECD oil demand this year. In line with the typically low seasonality, total world oil demand in the second
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This note was uploaded on 05/07/2008 for the course ECON 921 taught by Professor Accor during the Spring '08 term at Ryerson.

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OPEC Monthly Oil Market Report - April 2008 - OPEC...

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