Crude followed equities lower yesterday on continued news of the spreading coronavirus. The World Health Organization has officially labeled the situation a pandemic. Downward pressure continued with crude prices falling overnight after President Trump said the US would restrict all travel from Europe for the next 30 days to try to contain the coronavirus.
In other news, the Energy Information Administration in its latest Short-term Energy Outlook (STEO) revised its retail diesel estimate for the year. The 2020 diesel estimate was pegged at $2.54 gallon, a downward revision of 40 cents from the prior month STEO while cutting the 2021 price 30 cents to $2.73 gallon.
The March STEO reflects a reduced assumption for global economic growth along with reduced expected travel globally because of the 2019 novel coronavirus disease. The STEO also stated global petroleum and liquid fuels consumption will average 99.1 mmbpd in the first quarter of 2020, a decline of 0.9 mmbpd from the same period in 2019. The EIA expects global petroleum and liquid fuels demand will rise by less than 0.4 mmbpd in 2020 and by 1.7 mmbpd in 2021.
The EIA reported a larger-than-expected build for crude of 7.7 MMbbls, versus an expected build of 2.3 MMbbls. At Cushing, the EIA reported a 0.7 MMbbls build. The EIA reported distillates and gasoline had larger-than-expected draws.
WTI Crude is trading lower this morning at $31.01, a loss of $1.97.
Fuel is down in early trading this morning. Diesel is trading at $1.1499, a loss of 8.8 cents. Gasoline is trading at $0.9243, a loss of 18.6 cents. Gasoline losses are of note as they are likely affected by decreased travel by cars in the US due to the coronavirus. People are not going to normally scheduled events such as concerts or sporting events and are holed up in their houses more so than previously.