Fundamentals
The much anticipated meeting between OPEC and non-OPEC producers will be on the 17 April, however Iran may not be present. The country has clearly stated that it has no interest in partaking in a production freeze and has been increasing production with a target of 4 million barrels per day (b/d). The Department of Energy (DoE) oil report came out with another week of inventory builds (increase) in crude oil stocks of 1.317 million barrels (m/b), the total stands at 13% higher than last year. However, this was lower than forecast and along with drawdowns (reductions) in gasoline and distillate inventories the market moved higher after two bearish sessions.
Technicals
The market is supported at the $33.30 level and finds resistance at $38.50.
What to expect tomorrow?
Japanese trade data, as well as, Bank of Japan (BOJ) governor Kuroda speaking. Traders will be watching for comments connected to further rate cuts to boost economic growth. Out of the United States we will see labour and manufacturing figures. Labour data has held up well despite a contraction within the manufacturing sector, continued strong employment numbers will further a case for Fed rate hike in June.
• Japan exports forecast at -3.1%
• Japan trade balance forecast at 389 billion
• US Philly Fed manufacturing index forecast at -1.7
• US initial jobless claims forecast at 286K
• US continuing jobless claims forecast at 2228K
• US JOLTs job openings forecast at 5000K
Developments
The Chinese retail sector is starting to feel the effects of economic contraction. The growing middle-class are starting to reign in their spending habits, even the luxury market is seeing a steady decline in sales. This is worrisome for a country which is relying on a strengthening consumer base to help the country transition from a manufacturing to a service based economy.