Oil Demand Projections Get Worse, Putting Additional Pressure On Prices

COVID-19: Oil majors slash 2020 spending by 18%

COVID-19: Oil majors slash 2020 spending by 18%

Oil prices slipped back in Asian trade on Thursday, as a Senate vote on a massive stimulus package to help the coronavirus-ravaged USA economy was delayed.

On the Multi Commodity Exchange, crude oil for delivery in April traded higher by Rs 103, or 5.5 per cent, to Rs 1,976 per barrel in 27,659 lots. $2 trillion emergency stimulus will bolster economic activity.

"Oil markets received a lift from the USA stimulus chatter, but for the most part activity remains rudderless, awash in a sea of oil", Stephen Innes, market strategist at AxiTrader, said.

NTD News refers to the novel coronavirus, which causes the disease COVID-19, as the CCP virus because the Chinese Communist Party's coverup and mismanagement allowed the virus to spread throughout China and create a global pandemic. Inventories, which have risen for nine straight weeks, are expected to keep growing as fuel demand declines and refineries pare back activity.

The data showed gasoline inventories fell by 1.5 million barrels, more than twice the expected drop, while distillate stockpiles were lower by about 680,000 barrels, compared with an expected drop of 1.9 million barrels.

Goldman Sachs forecast global oil demand, which stood at around 100 million barrels per day (bpd) previous year, will fall by 10.5 million bpd in March and 18.7 million bpd in April.

The lack of storage room will lead to the global oil industry to look for alternative places to store the extra crude.

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"A demand shock of this magnitude will overwhelm any supply response including any potential core-Organization of the Petroleum Exporting Countries output freeze or cut", the investment bank said.

Oil stocks are already rising with tanks around the world filling fast despite a 50%-100% jump in leasing costs.

The United States said Wednesday it has urged Saudi Arabia to "reassure" oil and financial markets as the world grapples with the outbreak.

"If prices do not rebound quickly, we'll see a significant impact on now producing fields and future supply", it said.

Crude oil prices on Wednesday rose 5.5 per cent to Rs 1,976 per barrel as participants widened their positions tracking a positive trend overseas.

The U.S.' crude oil imports decreased by 422,000 barrels per day (bpd) to 6.12 million bpd for the week ending March 20, and crude oil exports saw a decline of 528,000 bpd to 3.85 million bpd, according to the EIA data.

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