Oil edges down as traders assess China's oil demand

Coronavirus impact Opec cuts oil demand forecast for 2020

Coronavirus impact Opec cuts oil demand forecast for 2020

Volume is also below average.

"The lack of enthusiasm from the Russians to deliver an additional 600,000 barrels per day in deeper production cuts could prove (costly) in stabilizing prices in the short-term", Edward Moya, senior market analyst at OANDA in NY, said in a report.

Brent futures LCOc1 fell $1.20, or 2.2%, to settle at $53.27 a barrel, their lowest close since December 28, 2018, while U.S. West Texas Intermediate crude CLc1 fell 75 cents, or 1.5%, to settle at $49.57, the lowest close since January 7, 2019.

Oil prices rose about 1% on Tuesday, up from 13-month lows as the number of new coronavirus cases slowed in China, easing some concern over the potential for lengthy oil demand destruction.

Vitol SA, Royal Dutch Shell Plc and Litasco SA are among firms asking about hiring supertankers for storage purposes as a sharp drop in Chinese demand due to the coronavirus prompts requests for cargo deferments, according to people familiar with the matter, shipbrokers and oil traders.

"China's refiners are processing 15% less crude and that could get a lot worse if the virus doesn't peak this month", Edward Moya, senior market analyst at OANDA, told Reuters.

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Thousands of them are poached every year due to their medicinal value and human consumption in countries like China and Vietnam. The study also revealed that the virus may dock into a receptor in human cells known as ACE2, profound in people's lungs.

A committee appointed by the Opec club of oil-producing countries and its allies to study the effects of coronavirus recommended additional output cuts on Saturday, Algeria's energy minister said.

Oil traders also said they are concerned the proposed reduction would not be sufficient to tighten global markets.

The joint technical committee "recommended extending until the end of 2020 the current production reduction agreement. and proceeding with an additional reduction in production until the end of the second quarter of 2020", Arkab said.

When Novak does give his response, it will be a market moving event. If Russia decides to go along with the move by OPEC+ then look for a strong short-covering rally. If he says no change then prices could plunge to multi-year lows.

Crude inventories rose by 6 million barrels last week, compared with analysts' expectations for a build of 3 million barrels, API said.

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