Crude oil prices closed at the highest level all year as concerns about supply and demand continue to simmer. Not only do we have continuing attacks on Nigerian oil infrastructure and a breakdown of the Venezuelan socialist system, we also have record-breaking demand--demand that has killed subpar global economic growth and demand that could explode if the global economy gets any momentum. The one place where demand should be not be taken into consideration is not in China--even though it’s near a record high--but in India.
Crude oil prices are trying to stabilize as traders and oil companies try to predict when oil production will find equilibrium with demand. There is a wide degree of different thinking on this topic, but I predict it will happen much sooner than people think. We’re faced with massive cap x cuts and plunging rig counts, as well as the inability to get capital to fund oil projects.
Spring is busting out all over, and so is gasoline demand. Low gas prices are causing a buying frenzy at the pump as gasoline demand in the month of March hit an all-time record high. According to the American Petroleum Institute (API) the lowest average price for regular unleaded gasoline in 12 years has Americans guzzling gas like never before.
India is in talks with some Gulf nations to buy oil to fill its strategic reserves and sell food in return, seeking to use its position as the world's third-largest oil importer to both secure energy supplies and boost exports. Indian Oil Minister Dharmendra Pradhan told reporters the idea was still fluid, but New Delhi had held preliminary conversations with the United Arab Emirates.
The Reserve Bank of India cut its policy interest rate to a 4-1/2 year low of 6.75% on Tuesday, in a bigger-than-expected move that, with inflation running at record lows, could help an economy in danger of slowing down.