Fresh twists and turns in the Iran nuclear deal saga this week made an already complicated picture even harder to read.
As the prospect of a last-minute band-aid solution gradually came to light, Brent backed off from its fresh four-month-high close of $75.17/ barrel notched on Monday, though it did not yield much ground.
Even a surprisingly bearish set of US weekly stocks data and a fortnightlong dollar rally could not push the crude benchmark below $73.
The chances of the EU allies being able to win the battle of wits against US President Donald Trump, who is insisting on a “fix” to the 2015 Iran nuclear deal, remain slim. Meanwhile, Iranian foreign minister Mohammad Javad Zarif ratcheted up anti-US rhetoric in a video message, ruling out renegotiation of the accord. However, we are now accounting for the possibility that the EU may be able to cobble together an understanding that is just enough to avert drastic action by Trump on May 12, the deadline for him to extend Iran sanctions waiver.
We had assigned such an event low probability in our evaluation of the various possible outcomes last week, which we have modified in view of the latest developments.
Iran supply disruption fears and Venezuela’s production woes have given oil bulls plenty of grist since the start of 2018. A near-continuous draining of OECD inventories since August last year, disciplined production cuts by the OPEC/non-OPEC producers, and healthy global oil demand growth have provided foundational support to oil prices.
But that does not mean there are not bearish factors on the horizon. We can see at least two. One, US production growth does seem to be on a strong upward trajectory. Shale drillers are pumping much more tight oil using far fewer rigs than last year.
The challenge of moving crude from a bloated Permian that has outgrown its pipeline evacuation capacity to domestic refining and export markets on the US Gulf Coast loom large for drillers in the largest and most prolific of shale basins. Yet, tight oil production was above or towards the high end of the guidance range provided by the drillers in the first quarter and they are now more sanguine for the full-year 2018.
A stronger US dollar, runaway inflation, and accelerating interest rates could become a nemesis for high oil prices. The US Federal Reserve left its key interest rate unchanged at 1.50-1.75% at its meeting May 1-2 as expected and offered no clues as to whether it would quicken its pace of rate hikes beyond the three it has been telegraphing for 2018.
Nonetheless, the financial markets are preoccupied with every bit of US macroeconomic data that might point to stronger monetary tightening, which would raise borrowing costs and could dampen economic growth. If that is at the risk of coming to pass, oil market participants will need to keep a close eye on global oil demand growth, one of the essential ingredients of crude market rebalancing since last year.
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Already, lubricant players have established their footholds here in Bangladesh, with international brands.
However, the situation is being tough as too many brands entered in this market. So, it is clear, the lubricants brands are struggling to sustain their market shares.
For this reason, we recommend an impression of “Lubricants shelf” to evaluate your brand visibility, which can a key indicator of the market shares of the existing brands.
Every retailer shop has different display shelves and the sellers place different product cans for the end-users. By nature, the sellers have the sole control of those shelves for the preferred product cans.The idea of “Lubricants shelf” may give the marketer an impression, how to penetrate in this competitive market.
The well-known lubricants brands automatically seized the product shelves because of the user demand. But for the struggling brands, this idea can be a key identifier of the business strategy to take over other brands.
The key objective of this impression of “Lubricants shelf” is to create an overview of your brand positioning in this competitive market.
A discussion on Lubricants Shelves; from the evaluation perspective, a discussion ground has been created to solely represent this trade, as well as its other stakeholders.Why “Lubricants shelf” is key to monitor engine oil market?
The lubricants shelves of the overall market have already placed more than 100 brands altogether and the number of brands is increasing day by day.
And the situation is being worsened while so many by name products are taking the different shelves of different clusters. This market has become more overstated in terms of brand names and local products.
You may argue with us; lubricants shelves have no more space to place your new brands. You might get surprised by hearing such a statement. For your information, it’s not a surprising one.
Regularly, lubricants retailers have to welcome the representatives of newly entered brands.
And, business Insiders has depicted this lubricants market as a silent trade with a lot of floating traders.
On an assumption, the annual domestic demand for lubricants oils is around 100 million litres, whereas base oil demand around 140 million litres.
However, the lack of market monitoring and the least reporting makes the lubricants trade unnoticeable to the public.
Headline crude prices for the week beginning 11 February 2019 – Brent: US$61/b; WTI: US$52/b
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