What to Watch

China-U.S. Trade Dispute Could Knock Oil Demand, Says IEA

 The U.S. China trade spat could put a damper on consumers’ appetite for oil, warned the International Energy Agency on Friday.

In its closely watched monthly oil market report, the IEA said it continued to expect global oil demand to grow by 1.5 million barrels a day in 2018, but cautioned that potential U.S. and Chinese trade tariffs posed a “downward risk” to the forecast.

The Trump administration’s planned tariffs on Chinese imports and retaliatory measures announced by Beijing would weigh on the global economy, with “strong consequences for oil demand,” the agency said.

The IEA estimated that a reduction of 1% in world gross domestic product growth would reduce oil demand growth by around 690,000 barrels a day.

Meanwhile, oil prices were mixed on Friday after the IEA confirmed a robust oil demand forecast for the full year.

Brent crude, the global benchmark, was up 0.33%, at $72.26 a barrel, on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.42%, at $67.35 a barrel.

Energy News

Robert Murray to President Trump: My Firm Will Survive

Robert Murray, chief executive and controlling owner of Murray Energy Corp., said that growing demand for coal  in Asia, along with his company’s growing exports to that region, have revived his business. Mr. Murray, who had warned his firm could go bankrupt if it didn’t get a bailout from federal regulators, indicated his business will thrive even without the government’s help.

GE Explores Hybrid Deals, Spinoffs in Strategic Review

General Electric Co. is exploring a public offering for one of its divisions and discussing hybrid deals with public companies to combine assets, write the WSJ’s Thomas Gryta, Dana Mattioli and David Benoit. GE is now considering deals that would build bigger businesses that are better positioned in their sectors, such as its merger with Baker Hughes, an oil-field services company that GE combined with its own oil-and-gas operations.

“For these two behemoth oil companies [Exxon and Chevron] to claim economic hardship is downright offensive and insulting to the hard-working farm families and ethanol producers that depend on the [U.S. Renewable Fuel Standard].”

– Bob Dinneen, president of the Renewable Fuels Association

Surging Demand for Lithium Spurs Interest in European Mines

Rising demand and prices for lithium, coupled with China’s stranglehold on supply, are reviving interest in mining Europe’s reserves of the coveted metal some call white petroleum, writes the WSJ’s William Wilkes. Prices for lithium used in the batteries that power anything from mobile phones to Teslas more than doubled to $21,000 a ton in the past two years.

WSJ Energy In-Depth

What Happened to the Oil Glut?

The vanishing oil glut has analysts talking about potential supply shortagesin the future, write the WSJ’s Benoit Faucon, Summer Said and Anant Vijay Kala.

Excess inventories of stored oil by the world’s industrialized economies are now at their lowest level in more than three years, based on a five-year running average, according to data by OPEC.

With that cushion gone, analysts say geopolitics may again start playing an outsize role in oil markets.

“Global oil supply and demand are quickly approaching a balanced position after spending several years in an excessively high inventory mode,” said Dominick Chirichella, co-president of the New York-based Energy Management Institute, in a report Wednesday. “Geopolitical risk is bubbling up in the oil pits.”

 

 

Big Number

19.4%

China widened its trade surplus with the U.S. by 19.4 % in the first quarter of this year compared with 2017, Reuters reports.

FutureCurve

Today: Oil-services firm Baker Hughes Inc. releases its count of active drilling rigs, a bellwether for production in the U.S. oil industry.

April 18–19: IQPC hosts the Oil & Fuel Theft Summit in Geneva. Speakers include Mahmoud Al-Bayati, the director general for counter-terrorism for Iraq, William J. Waggoner, the chief executive of the Mexico Petroleum Company and Daniel Gianfalla, a member of the national maritime security advisory committee at the U.S. Department of Homeland Security.