OPEC analysis at the OPEC+ Joint Technical Committee (JTC) in Vienna estimates a small reduction in average global oil demand growth of 0.2 MMbpd; the “worst case” scenario pointed to a 400 kbpd drop in demand for 6 months, which would lead to a surplus of 600 kbpd in 1Q20 and 1 MMbpd in 2Q20 if current cuts are maintained. (Reuters) Saudi Arabia wants at least a 500 kbpd- 1 MMbpd cut in response to the demand shock from the coronavirus, however, Russia is pushing back as it focuses on uncertainty around the severity and duration of the virus. (Bloomberg)
Yesterday, the market was unable to sustain a morning rally. Late in the day, the API reported bearish crude inventory news and the WTI closed below $50/bbl for the first time since January 2019. Crude prices are up in early trading this morning as markets recover from the previous two days of losses on news that Saudi Arabia is pushing for deeper cuts with OPEC+ and the continued decline in Libyan oil production.
The API’s data last night:
The API reported a larger-than-expected build for crude of 4.2 MMbbls versus an expected build of 2.8 MMbbls. At Cushing, stocks rose with a build of 1.0 MMbbls. The API reported distillates had a draw and gasoline had a build in line with expectations. The EIA will report numbers later this morning.
Crude prices are up this morning. WTI Crude is trading at $50.99, a gain of $1.38.
Fuel is up in early trading this morning. Diesel is trading at $1.6388, a gain of 5.5 cents. Gasoline is trading at $1.4826, a gain of 3.9 cents.
This article is part of Crude