Technical & Fundamental Oil Reports Specialists

Follow us

The IMF calls for accommodative monetary policies

Published Tuesday, January 20th, 2015

Life did not come to a standstill just because the US was celebrating Martin Luther King’s birthday and the news that has filtered through over the last 24 hours has been rather bearish. It all started yesterday morning with the Chinese Premier going on record saying that the country’s economy is facing significant downward pressure. He proved to be correct as we learnt this morning. According to the National Bureau of Statistics the country’s economy expanded 7.4% in 2014, the weakest growth for 24 years. After losing $1.33/bbl yesterday front-month Brent is down another 50 cents/bbl this morning. Not even December Chinese implied oil demand that was up 8% on the year at a record 10.6 mbpd according to Reuters has been able to support oil prices.

Of course the fact that Iraqi December oil production has reached 4 mbpd helped oil prices drift lower yesterday. This morning’s downward pressure is also aided by the IMF. The Fund revised downwards its 2015 global GDP growth forecast by 0.3% to 3.5%. The Eurozone will now expand by 1.2%, 0.2% less than previously thought whilst Latin American growth has been cut by 0.9% to 1.3%. On the positive side, the US economy remains resilient in 2015 as its GDP growth was upped by 0.5% to 3.6%. For commodity suppliers the particularly bad news from the IMF is the forecast that GDP growth in China will fall to 6.8% this year and 6.3% next.

to read the rest of the report, please click here

Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.