Chinese Diesel Consumption Drops for 4th Consecutive Month

As the Chinese switch from bicycle to automobile, gasoline consumption is certain to rise. The IEA forecasts Chinese gasoline demand to rise 200k barrels per day in 2016. But that’s neither here or there; because today the Chinese said all hell was breaking loose and their demand for diesel fuel, which is a key tell for their industrial capacity, was waning for the fourth month in a row.

Naturally, some people think the Fed can help out the price of oil.

“The Fed will pave the way for the oil market,” Danske Bank’s Pedersen said. “If it strikes a more concerned tone that will help establish a bottom for oil prices. If it continues to signal several rate hikes this year the slide will continue and we could very well reach new lows.”

The House of Saud certainly have no interest in helping out your WTI quotes–which are lower by more than 3% this morning.

OPEC Secretary-General Abdalla El-Badri reiterated he wants oil producers outside the group to assist in reducing the global oversupply. He said at a conference in London on Monday that there are signs supply and demand will start to come back into balance this year, citing a forecast increase in global demand of about 1.3 million barrels a day, and a contraction in non-OPEC supply of about 660,000 a day.

Saudi Aramco will continue to produce oil until every company in the Bakken shale are shut down.

Meanwhile, stocks are lower this morning, merely a pittance of 16 NASDAQS. We might in fact rally today–if oil can bounce from these levels. Nevertheless, I will continue to reduce my exposure to SPY throughout the week, while holding TLT.