• Iran supports extension of the ‘cut’ deal: Bijan Zanganeh, Iran’s petroleum minister, has been quoted as saying that Iran would support an extension to the deal. Several other countries, including Saudi Arabia, Venezuela and Oman have already lent support to the extension, raising the probability of the OPEC/NOPEC deal staying intact until the end of the year.
• US crude inventory seen falling: A Bloomberg survey sees US crude oil inventory having fallen 1.4MMbbls WoW to 532MMbbls for the week ended 14 April 2017. In terms of products, gasoline and distillate inventory could drop by 2MMbbls and 1MMbbls, respectively, with refinery utilisation improving marginally by 0.2% to 91.2%. Drawdown in oil and products inventories is likely to help the current rally in oil prices continue.
• Australia Met coal supplies returning: The Goonyella coal rail system in Queensland could reopen as early as 26 April, vs the initial expectation of around 8 May, though with lower capacity and speed restrictions. With this, all four of Aurizon’s rail systems in Central Queensland will be operational, increasing Met coal exports from Australia and easing the supply shortage in key importing markets, including China and India, from next month onwards.
• Wage talks at Collahuasi: To allow more time for negotiations and avoid a stand-off (as seen at the Escondida mine earlier this year), management and labour unions at Collahuasi, Chile’s second-largest mine, have started wage negotiations early; the current contract expires in October 2017.
• Brazil sugar production: Conab, the Brazilian crop agency, expects the country’s sugar production to be flat at 38.7m tonnes for the 2017/18 season, which starts 1 April 2017. Sugar cane processing in the country could drop 1.5% YoY to 648m tonnes; however, high cane availability in the sugar industry (47.1%, vs 45.9% in 2016/17) is likely to keep sugar production flat.
• Dry weather in Latam supporting harvesting: After severe rains and floods over the past few weeks, the weather is getting drier in Latin America, supporting the soybean and corn harvests in Argentina and Brazil.