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April 17, 2014

APRIL 17, 2014



Macroeconomic Factors

  • Initial jobless claims have dropped to a fresh post-recession low of about 300,000 per week.
  • The most recent data on Chinese GDP shows growth of 7.4%, slightly lower than the target of 7.5%, but in line with most estimates.
  • Growth in Europe has improved slightly, and European central bankers have shown more attention to fighting deflation. This has been reflected by successful bond auctions in Spain, Italy, and even Greece.
  • To summarize, the economic data have improved with the weather in the US, suggesting modest upside pressure on energy prices.


Potential Risks

Russia’s sudden invasion and subsequent occupation of the Crimean Peninsula rocked international energy markets in the month of March. Given that Russia is the world’s largest exporter of oil and gas, financial media was quick to hype the potential impact this could have on the rest of the world. Thankfully, cooler heads prevailed in more detailed analysis, like this excerpt from a BoA Merrill Lynch Global Research Report:

“Russian oil does indeed flow in large quantities through the Black Sea, making the Russian Navy station of Sevastopol as well as the whole Crimean peninsula crucial strongholds to control both Azov and Black Sea commerce flows. These routes are, for now, secure and diverse. Thus, while oil has risen in sympathy with other commodities, we believe the upside risks are rather modest from here unless the conflict escalates…”

We will continue to monitor the news closely for new developments on this story, as well as countless other potential risks in global energy markets.


This month’s forward curve does not appear to have shifted significantly from February – or even the prior December. However, when projected out into the spring of 2015, it is clear that the market now projects oil prices to be higher than it had in February.

To download the full version of this report CLICK HERE.


Filed under:Eyes on Energy | by Fuel Expert @ 4:13 pm |