Commodity Update March 31, 2021: U.S. Oil Reserve Increase, 10-Y Bond Hits 14-Month High

Commodity update as of 10:00 local time in Thailand on March 31, 2021

Asia Wealth Securities (AWS) stated that the U.S. Petroleum Institute (API) reports the remaining crude oil reserves of the U.S. industrial sector last week (Ending 26 Mar) increased 3.9mn barrels, an increase in volume compared to the previous week’s increase of 2.9mn barrels.

Issues to be followed are (1) the reporting of total crude oil reserves in the U.S. according to the U.S. Energy Information Administration (EIA) (Market Consensus is expected to increase by 600,000 barrels) and (2) OPEC+ meeting starting 1 Apr, AWS expected OPEC+ to maintain the oil production ceiling in May for a another month, including the attitude of Saudi Arabia that AWS expected to continue to cut production voluntarily to reduce the production capacity further given the situation, the global oil demand is still weak.

 

Meanwhile, bond yield increased which put pressure on the overall short-term investment – the 10-year and 30-year Treasury yields this morning stood at 1.715% and 2.375%, respectively which accelerated inflation.

However, AWS stated that it did not put much weight on the Bond Yield recovery as this is partly a reflection of confidence in the overall economic recovery after the COVID-19 vaccination operation has progressed including the ongoing government economic stimulus measures, especially this week, plans to invest in the infrastructure of USD3.0tn of President Joe Biden.