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“Moderate and uneven”

Published Wednesday, April 15th, 2015

That’s the verdict of the IMF on global growth for this year in its latest World Economic Outlook, with lots to worry about stemming from geopolitical tensions and disruptive shifts in financial markets. It remains particularly concerned about the impact of the anticipated rise in US interest rates, but on the positive side it sees lower oil prices adding 0.5% to global growth by next year. The net result is that it has kept its forecast of global GDP growth this year at 3.5% and marginally increased next year to 3.8%.

Moderate is perhaps the apt description for the long awaited Chinese 1Q GDP growth figure which has come in as expected at 7%, the lowest level for six years. The IMF believes that China will grow at 6.8% an average this year, falling to 6.3% next. India is the current IMF star with a predicted 2015 growth rate of 7.5% and Russia the dunce, contracting by 3.8%. The eurozone is expected to grow at 1.5% (+0.3% on the last forecast) and the US 3.1%, a reduction of 0.5%.

Oil news was interesting and possible very significant. On the one hand the EIA believes that US shale oil production will fall in 2Q by around 60,000 bpd, on the other the fall will be temporary and in its latest yearly report it sees US production rising to 10.6 mbpd in 2020, an increase of 1 mbpd on its previous forecast. Russia confirmed that the oil-for-goods deal with Iran is being implemented which seems to imply there will be more Iranian oil in circulation whatever happens on sanctions.

to read the rest of the report, please click here

Posted by David Hufton