Cheap oil isn’t going away, even after record production cuts
Oil prices barely budged Monday, remaining near 18-year lows. And the S&P 500 energy sector (XLE) lost further ground, leaving it down a stunning 43% on the year. The muted reaction on Wall Street reflects a realization that despite the historic nature of the OPEC+ cuts, they aren’t nearly deep enough to erase the epic supply glut facing the oil market. Click here to read more from CNN.
Oil producers pin hopes for massive cuts on unprecedented stockpile purchases
An unprecedented deal by oil producers to curb supply to match demand hollowed out by the coronavirus pandemic is set to depend partly on purchases by consumer countries for their strategic stockpiles on a scale not before seen. Officials and sources from OPEC+ states indicated the International Energy Agency (IEA), the energy watchdog for the world’s most industrialized nations, may announce purchases of up to several million barrels to buoy the deal. Click here to read more from Yahoo Finance.
Trump administration to rent 27M barrels of storage space to oil companies amid falling prices
DOE is negotiating contracts with nine oil companies that want to use space in the nation’s Strategic Petroleum Reserve (SPR). The deal will use 23 million barrels of capacity in the 77 million-barrel tanks. “When producing oil you have two options — you either use it or you store it. With the impacts caused by the COVID-19 pandemic, we are seeing an enormous decrease in demand as our country works to contain the virus,” said U.S. Secretary of Energy Dan Brouillette. Click here to read more from The Hill.
Oil prices plunge on grim IMF economic forecast
In its first World Economic Outlook report since the spread of the coronavirus and subsequent freezing of major economies, the IMF estimated on Tuesday that global gross domestic product will shrink 3% this year. That compares to a January projection of 3.3% expansion and would likely mark the deepest dive since the Great Depression. It would also dwarf the 0.1% contraction of 2009 amid the financial crisis. Click here to read more from Oilprice.com.