Yesterday, WTI crude tracked with US equities to finish the session higher. Prices continue to advance in early trading this morning based upon better OPEC+ compliance by cartel members with record production cuts. The International Energy Agency (IEA) increasing demand forecasts for 2020 is also moving markets today.
In its monthly report, the IEA forecast oil demand at 91.7 MMbpd in 2020, citing higher than expected consumption during the lockdowns. The forecast is 500 kbpd higher than its estimate in May’s report. However, the agency cautioned that a fall in airplane travel due to the coronavirus means the world will not return to pre-pandemic demand levels before 2022.
The IEA said OPEC+ reduced its May output by 9.4 MMbpd, and overall oil supplies plunged by nearly 12 MMbpd in May. Iraq historically has one of the worst compliance rates among cartel members but has already made deep cuts to crude supplies for July.
In early trading today, crude prices are up. Crude is currently trading at $38.50, a gain of $1.38.
Fuel prices are up this morning. Diesel is trading at $1.1758, a gain of 3.9 cents. Gasoline is trading at $1.2072, an increase of 4.2 cents.