IEA Lowers Its Demand Growth Expectations

CRUDE OIL

June Crude Oil is lower this morning, and for the second day in a row it is finding resistance at the 9-day moving average. OPEC and IEA have both lowered their demand growth forecasts from last month. OPEC said in their monthly report yesterday that oil demand would rise by 1.30 million barrels per day in 2025 and by 1.28 million bpd in 2026. Both forecasts were down 150,000 bpd from their March forecasts. The IEA lowered its forecast for demand growth to 730,000 barrels per day for 2025, down from +1.03 million last month. For 2026, they put demand growth at +690,000 bpd. The OPEC report also showed that OPEC+ crude production fell 37,000 bpd in March due in part to reductions by Nigeria and Iraq. Kazakhstan’s production rose to 1.852 million bpd last month, above its OPEC+ quota of 1.468 million bpd for January-March. A government source in Pakistan said the nation is considering importing crude oil from the US for the first time in an attempt to negotiate for lower hat tariffs. For this week’s inventory reports, the early Reuters poll as an average expectation for US crude oil stocks to be -1.0 million barrels last week, with distillates expected to be -1.9 million and gasoline -1.6 million. Refinery runs are expected to be +0.4% to 87.1%.

NATURAL GAS

June Natural Gas extended yesterday’s decline overnight and fell to its lowest level since February 4. The market also fell to the 200-day moving average at 3.371. Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 106.3 billion cubic feet per day so far in April, up from a monthly record of 106.2 bcfd in March. Executives at major EU firms have begun to show an openness to importing some Russian gas, which would be a major change. US gas covered 16.7% of EU imports last year versus Norway at 33.6% and Russia at 18.8%. For this week’s inventory reports, the early Reuters poll as an average expectation for US natural gas storage to show a net injection of 17-33 bcf last week. The five year average for the week is +62 bcf. As of last week, storage was -19.8% from a year ago and -2.1% below the five-year average. The 6-10 and 8-14 day forecasts still show above normal temperatures in the eastern two-thirds of the US and normal to below normal west.

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