It is one hundred and twelve years after the birth of Glenn Miller, and while the oil market was in the mood for an overnight rally, it is now swinging lower. Here are ten energy-related points to consider on this (pinch! punch!) first day of the month:
1) A new month means a new onslaught of economic data releases, and specifically, manufacturing data. China has opened the floodgates overnight, and a bearish wave of numbers have flooded in. Both the official Chinese manufacturing number and the Caixin print were unanimous in being both below-consensus and showing a quickening pace of contraction to boot; the official PMI reached its lowest level since December 2011.
2) We’ve also had a bucketload of European economic data to consider today. The Eurozone manufacturing PMI index was a wee bit above consensus, showing expansion led by Germany, but kept in check by Spain, Italy and France. Eurozone unemployment was also positive, reaching a four-year low at 10.3%, while German unemployment remained at a record low of 6.2%.
3) Onto the Americas, and Brazil saw manufacturing come in well below expectations at 44.5 (versus 46.5 expected). Canadian economic growth for Q4 was mucho better than expected, up +0.8% annualized, while official US manufacturing index was also decent, coming in better than expected at 51.3 (versus 51 expected).
4) The chart below from the EIA highlights how Iraq showed the second-largest increase in oil production last year, behind the US. Production averaged 4.0 mn bpd last year, almost 700,000 bpd higher than the volume seen in 2014. This increase meant it accounted for