FILE PHOTO: A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. REUTERS/Angus Mordant/File Photo
“Even if these cuts provide a floor to prices they will not be able to boost prices given the scale of inventory builds we are still staring at,” Energy Aspects analyst Virendra Chauhan said, referring to fast-filling storage amid the slide in demand from end-users. “This 9.7 million bpd ‘headline’ deal represents a 12.4 million bpd cut from claimed April OPEC+ production but an only 7.2 million bpd cut from 1Q20 average production levels,” Goldman Sachs analysts said.However, energy analysts at FGE expect oil stockpiles in developed nations to grow in the second quarter to levels last seen in 1982.
“Most of the SPR are pretty full already. Probably China still has some room, but the rest, I doubt there is anything significant,” he added. “China is unlikely to make any firm commitment, especially as Far East consumers are still paying a premium for Mideast supplies versus western consumers,” one Beijing-based state oil company official said on condition of anonymity, citing company policy.
The situation is aggravated by the price dumping by the Saudis, despite the Agreement to reduce export volumes, which have just announced a May discount for Southeast Asia of 4.2 usd/bar and the preservation of a discount for Europe of 10.5 usd/bar. Trump will be offended.
It looks the oil market is suffering from Covid-19 virus
Maybe the “market” doesn’t believe production will be cut.
OIL - Secular Horizon... Historic Deal vs Big Oil Era End Rising Risk
Record oil output cuts fail to make waves in Fake News -hit market
Sunset industry.
If the demand decreased by more than 10% and inventories are full, a reduction of 10% is still more than market demand. So the price will fall. Maybe in 2-3 months with this output cut and some additional output reductions due to prices the price starts to increase, again.
An American 'president' is actively working to make gas more expensive for consumers
Let’s build and repair roads Oil is cheap Summer is coming up People need jobs
Fuel consumption has reduced significantly That may be a factor
The oil should be more polite.
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Source: CNBC - 🏆 12. / 72 Read more »