By Srinivas Chowdary Sunkara // petrobazaar // 6th March 2020.
Brent oil prices for May delivery lost $1.41 to close at $49.99 on London based ICE Futures Europe exchange where as WTI oil futures prices to be delivered in April slipped 88 cents to settle at $45.9 a barrel on NYMEX last night. In Shanghai, Crude oil main contract futures prices dropped by 1.7 Yuan or 0.45% to 373.7 Yuan/barrel while MCX crude oil current month contract futures prices went down Rs.76 to Rs.3431 yesterday. Brent traded at a premium of $4.09 over WTI during the session.
The world crude oil benchmark price indexes turned lower and traded irregular yesterday on worries over the gloomy global economic picture caused by the corona virus outbreak across the world. Both the benchmarks traded high yesterday after OPEC+ announced deeper production cuts of 1.5Mbpd till the year end. Later on both the benchmarks pared earlier gains on concerns of non-OPEC producers disagreement over the deeper cuts. Non-OPEC countries are expected to contribute 500000 bpd to the over all extra cut till the second quarter. Markets hope that Russia and Kazakhstan will ultimately endorse the agreement. Turning to weekly reports, U.S crude stocks rose 785Kb during the last week, trouncing analysts expectation of 2.64 Mb build. Product stocks were dropped and U.S crude production was stood at 13.1Mbpd. The weekly numbers could extend support to oil prices.
Today morning, Asian markets opened in red followed by the market concerns of deteriorating oil demand across the market. In my opinion, The significant catalyst would be the rebound in demand growth, not supply cuts to prop up oil prices .
Good day to all and happy week end.
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