By Srinivas Chowdary Sunkara // petrobazaar // 15th April 2020.
Brent oil June futures prices dropped $2.14 or 6.74 pct to close at $29.6 on London based ICE futures Europe exchange and U.S oil futures, WTI to be delivered in May shrank $2.3 or 10.2 pct to settle at $20.11 a barrel on New York Mercantile Exchange last night. In Shanghai, Crude oil main contract futures dropped by 13.5 Yuan or -4.5% at 280.8 Yuan/barrel while MCX crude oil current month contract futures were not traded due to local holiday in India. Brent premium over WTI widened to $9.49 a barrel during the session.
The world crude oil futures price indexes turned down during the yesterday's trading session despite of deep production cuts agreement by producer's group. It seems that investors were unconvinced that record supply cuts are not sufficient enough to balance the market, pummeled by coronavirus pandemic. Analysts are in the opinion that the demand destruction forecasts ranging from 15 million to 22 million bpd in April 2020 and expected glut in the coming days due to filled up tanks are the factors that outweighed the production cuts pact. The action phase of announcing 10Mbpd cuts by producer's group kept floor to oil prices but it could not provide support to push prices up. Now the discussion phase of cuts and joining new members into the group is able maintain the current price levels. It will translate into further action of rein in supplies, If prices start to fell further. Turning to weekly data, API reported a build in U.S crude, gasoline and distillates by 13.1Mb, 2.2Mb and 5.6Mb respectively. U.S government numbers awaited later today. The consensus is on 10Mb pile up in crude stocks. Today, Oil prices are trading in bearish mood.
Good day to all.
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