At the March Short-Term Energy Report, the DOE/EIA raised its
oil price forecast for 2012 to US$106/bbl, up +$5/bbl from the
previous forecast amid concerns over geopolitical tensions in the
Middle East, growth in world demand and supply constraints in
non-OPEC countries. Yet, the agency revised lower its oil demand
projection for this year. Global oil demand is expected to reach
88.96M bbl, down from last month's estimate of 89.25M bbl million
last month but up +1.20% from the upwardly revised 87.9M bbl in
2011. Meanwhile, the OPEC also revised down slightly global oil
consumption for 2012 to 88.6M bbl from 88.2M bbl projected last
month while the IEA stated that global demand is expected to stay
unchanged at 89.9M bbl this year.
As far as other oil news is concerned, the IEA stated in a
report that, as the EU oil embargo begins in July, shipment from
Iran would drop by -50%. Yet, Saudi Arabia attempted to calm
market worries by pledging to take up the lost oil in Iran so
that oil supply to European countries would not be affected.
Meanwhile, the US President Obama and the UK Prime Minister
Cameron jointly said that the window for a diplomatic solution
with Iran was shrinking. Tensions over Iran are expected to
continue to exert influence on oil's direction in the
near-term.
As expected, the SNB left its monetary policy unchanged in
March. The central bank maintained the 3-month Libor target range
at 0-0.25% and pledged to maintain the minimum exchange rate of
CHF 1.20 per euro "with utmost determination". While
acknowledging the mixed macroeconomic outlook, policymakers
warned once again of the strength in the Swiss franc.
Policymakers stated that growth in Switzerland has "slowed
significantly over the course of the past year". For 2012, the
SNB is now forecasting moderate growth, at close to 1%. Inflation
forecasts were revised lower to -0.6% in 2012, from -0.3%
projected in December. For 2013 and 2014, general price levels
are expected to improve to +0.35 and +0.65 respectively. Despite
the absence of any announcement on further intervention, the SNB
continued to warn of the challenges imposed by appreciation in
Swiss franc. It also stated that the positive impact of the
pledge to keep the minimum exchange rate was the "reduced
exchange rate volatility".
For the dataflow, the US initial jobless claims probably
declined to 355K in the week ended March 10 from 362K a month
ago. The Philly Fed survey index might have climbed to 11 in
March from 10.2 while the Empire State Manufacturing Index
probably slid to 17.4 in March from 19.5 in the prior month.