Bullish EIA STEO Lift Markets
On Tuesday, WTI Crude finished the day up. It spiked mid-session on the news that OPEC+ may keep supply cuts in place past June. Crude prices are flat this morning, as traders weigh possible OPEC+ plans to deepen supply cuts against demand concerns made worse by a possible second wave of coronavirus infections as countries come out of quarantine. China suffered a setback as it eased restrictions after new cases emerged in Wuhan — the epicenter of the outbreak. This resurgence prompted an order for the entire population of 11 million to be tested for the coronavirus just a few weeks after emerging from quarantine.
A bullish Short-Term Energy Outlook (STEO) report by the EIA helped to lift markets yesterday. The EIA expects crude prices will average $23/b during the second quarter of 2020 before increasing to $32/b during the second half of the year. EIA forecasts that Brent prices will rise to an average of $48/b in 2021. For liquid fuels, firmer demand growth as the global economy begins to recover and slower supply growth will contribute to world-wide oil inventory draws starting in the third quarter of 2020. EIA expects global liquid fuel inventories will fall by 1.9 million b/d in 2021.
The API’s data last night:
The API reported a larger-than-expected build for crude of 7.6 MMbbls versus an expected growth of 4.4 MMbbls. At Cushing, stocks drew by 2.3 MMbbls – the first draw at Cushing since February. The API reported that gasoline had a smaller-than-expected draw, and distillates had a larger-than-expected increase. The EIA will report numbers later this morning.
Crude prices are relatively flat this morning. WTI Crude is trading at $25.81, a gain of 3 cents.
Fuel is mixed in early trading this morning. Diesel is trading at $0.8452, a gain of 0.7 cents. Gasoline is trading at $0.8981, a loss of 2.0 cents.
This article is part of Daily Market News & Insights
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