Oil falls as crude in US storage nears all-time high
27 April, 2020
Oil prices fell on Monday on signs that worldwide oil storage is filling rapidly, raising concerns that production cuts will not be fast enough to meet up with the collapse popular from the coronavirus pandemic.
USA oil futures led losses after US crude inventories rose to 518.6 million barrels in the week to April 17, near an all-time record of 535 million barrels occur 2017, while floating crude oil storage has hit an all-time most of 160 million barrels.
US West Texas Intermediate futures fell US$1.22, or 7.2 percent, to $15.72 a barrel by 0122 GMT, while Brent crude was down 33 cents, or 1.5 percent, at $21.11 a barrel.
Oil futures marked their third straight week of losses last week - and also have fallen for eight of days gone by nine - with Brent ending down 24 percent and WTI off around 7 percent.
“Rising inventories and weak demand are weighing heavily on sentiment,” ANZ analysts said.
Trading was extremely volatile the other day, within an extension of the selling which has dominated trading since early March as demand collapsed 30 percent because of the pandemic.
Traders expect demand to flunk of supply for months because of the economic disruption caused by the pandemic. Investors will be watching this week for results from oil majors including Exxon Mobil, BP Plc and Royal Dutch Shell.
Producers might not exactly be slashing output quickly or deeply enough to buoy prices, particularly when global monetary output is expected to contract by 2 percent this year, worse than the financial crisis.
Rig counts in the usa are down to the cheapest since July 2016, as the total number of coal and oil rigs in Canada has fallen to the cheapest since at least 2000, according to Baker Hughes data.
“The Permian Basin and New Mexico accounted for 62 percent of the shutdowns; an ominous sign considering this region has been one of the most prosperous in america,” ANZ said.
Kuwait and Azerbaijan are coordinating cuts, while Russia is set to reduce its western seaborne exports by half in-may.
THE BUSINESS of the Petroleum Exporting Countries and its allies including Russia, an organization referred to as OPEC+, pledged earlier this month to cut output by an unprecedented 9.7 million barrels each day in-may and June.
Source: www.thejakartapost.com