In a continuation of yesterday’s gains, crude prices are higher this morning. Markets continue to consider possible further cuts by OPEC+ as OPEC’s Monthly Oil Market Report is released this morning. OPEC’s estimate of 2020 demand growth has now been revised down by 0.23 mmbpd to +0.99 mmbpd versus the EIA also revising demand growth down by 0.3 mmbpd to 1.0 mmbpd in 2020 according to their Short Term Energy Outlook.
The downward revised demand growth would support further cuts to supply by OPEC+. Russia is taking its time to study the OPEC+ technical committee’s new output-cuts proposal, keeping the group in limbo as the global oil market awaits a definitive response to the coronavirus outbreak. (Bloomberg)
The EIA released their monthly Short Term Energy Outlook yesterday and had made a huge change in their forecasted diesel and gasoline prices. Last month 2020 retail diesel and gasoline were targeted at $3.11 and $2.63 respectively. This month those forecasts were changed to $2.93 for diesel and $2.53 for gasoline. These changes reflect the effects of the coronavirus and a warmer-than-expected winter across the northern hemisphere. Less fuel is being consumed by travel due to the infection and less fuel is being used for heating due to warmer weather.
The API’s data last night:
The API reported a larger-than-expected build for crude of 6.0 MMbbls versus an expected build of 3.0 MMbbls. At Cushing, stocks rose with a build of 1.3 MMbbls. The API reported distillates had a larger-than-expected draw and gasoline had a larger-than-expected build. The EIA will report numbers later this morning.
Crude prices are up this morning. WTI Crude is trading at $51.57, a gain of $1.63.
Fuel is up in early trading this morning. Diesel is trading at $1.6758, a gain of 4.9 cents. Gasoline is trading at $1.5762, a gain of 6.2 cents.
This article is part of Crude