Today’s trading day doesn’t really have too much driving news, which is causing the market to trade a bit sideways after crude gains around $2.00/bbl on the week.
Chinese manufacturing data for March came out last night and indicated a PMI of 55.1, the highest since May 2014. The PMI, released by the Chinese Federation of Logistics and Purchasing, is based on a 100 point scale. A PMI greater than 50 indicates manufacturing output is growing. Therefore, current Chinese production is increasing, which increases the demand for oil products.
While there has been continued coverage on the prospect that OPEC is leaning towards extending its production cut until the end of this year, Russia and the U.S. may be the all-important kinks to this logic. Recent production reports indicate that Russia has only cut 147,000 barrels per day out of its 300,000 target. At the same time, U.S. production has risen 377,000 barrels per day (Go U.S.A.!). Who knew these two former Cold War foes would be the new oil titans united in gaining market share from the embattled OPEC? This explains OPEC’s meetings over the last few weeks, which has caused the bulls to return to the market after the sharp sell-off we saw at the beginning of the month.
Baker Hughes just revealed that we added 10 oil rigs to the U.S. count which now stands at 662. May WTI crude presently trades up a modest $0.08 to $50.86/bbl, May RBOB is up $0.009 to $1.6927/gallon, and May ULSD trades higher by $0.0062 to $1.5667/gallon. It is also the last day of trading for April products and the end of Q1; hello April!