The First Signs Of Real Oil Demand Recovery Are Here

The First Signs Of Real Oil Demand Recovery Are Here”

"Market sentiment has turned cautiously constructive since the end of April and I expect it to remain as such unless there are major setbacks in terms of infection rates", said Vandana Hari, founder of Vanda Insights in Singapore.

The IEA said the easing of coronavirus-related restrictions was helping demand in energy markets.

So oil production is reacting in a big way to market forces and economic activity beginning a gradual but fragile recovery.

Meanwhile, US crude inventories fell after 15 weeks of declines, the Energy Information Administration said on Wednesday.

Oil is still down more than 50% this year after a rout that pushed prices below zero and the road back to pre-virus levels of demand looks long and uncertain.

The IEA expects global crude inventories to fall by about 5.5 million barrels per day (bpd) in the second half of this year.

"Our expectation is that oil markets reach the inflection point of the equilibrium of supply equating demand in late May/early June, with a deficit set to follow".

Goldman expects oil prices to have limited upside in coming months, citing a big inventory overhang and the ability for shut-in production in North America to restart if prices rally further. It now sees Brent prices averaging $37 a barrel and WTI at $33 this year.

More news: Four nurses from Hyderabad interact with UK's royals on Nurses Day

"We believe that the next stage of the oil market rebalancing will be one of range-bound spot prices with the most notable shifts being a decline in implied volatility as well as a continued flattening of the forward curve without long-dated prices rising yet", it said.

Despite a faster than expected recovery in demand and steep output cuts by OPEC+ and USA shale producers, oil price gains could remain limited in the near term due to huge global oil stock overhang and the potential for price-sensitive United States shale producers to restart wells quickly, Goldman said.

However, recovering demand and lower output would push the global oil market into deficit in June, it said in a note dated May 13. The agency boosted its 2020 demand estimate by 700,000 barrels a day, but it still remains set for an annual plunge of 8.6 million a day, or about 9%.

While now in less danger of hitting tank tops, global oil stock levels are expected to continue rising in the coming weeks, keeping pressure on benchmark prices and differentials, HSBC said in a note.

The catalyst behind today's strength is a report that showed China's daily crude oil throughput rebounded in April from a 15-month low in March as refiners cranked up operations to meet renewed fuel demand after lock downs imposed to prevent the spread of the coronavirus outbreak were eased.

This is still sharply down from previous year by 19.9 Mb/d.

Barclays still raised its forecasts for Brent and WTI by US$5 to US$6 a barrel for 2020 and by US$16 a barrel for 2021.

Like this



16 May 2020
Arvind Kejriwal Condoles Death Of Migrants In UP Truck Accident
The cops have retrieved injured labourers from the accident site and the wounded have been shifted to the hospital. Uttar Pradesh Chief Minister Yogi Adityanath expressed his deepest condolences to the families of the deceased.

16 May 2020
Unnerving Video Shows Just How Easily an Infection Can Spread Through Contact
Marianna University School of Medicine, involved 10 people in a makeshift restaurant, set up with a buffet table. A fluorescent substance, which is only visible under black light, represents the germs of the virus .

16 May 2020
India overtakes China in coronavirus cases, 11th most affected
According to the Union Health Ministry , 30 municipal areas account for 79 per cent of India's coronavirus cases. Goa reported 14 COVID-19 cases while Meghalaya and Puducherry registered 13 cases each.

16 May 2020
Messi predicts coronavirus lockdown will BENEFIT Barca when La Liga games resume
I'd have to go with Lionel Messi , who's more experienced, and Kylian Mbappe, who's the youngster making the biggest impression.

16 May 2020
Russia's Coronavirus Cases Surge By 10K as Total Surpasses 260K
Health officials reported 10 028 new cases over the last 24 hours, bringing Russia's total number of infections to 242 271. There is also varying reliability among the many tests so far developed.

16 May 2020
Ontario monitors rare inflammatory illness in children for COVID-19 connection
The name and definition are similar to those used in Europe, where the condition was first reported several weeks ago. The condition, rarely life-threatening if appropriately treated, requires immediate hospitalization of patients.

16 May 2020
Golf courses to remain closed in NI as England prepares for reopening
A return to action will also bring some welcome revenue into the club. 'The phone has been ringing off the wall all day [Monday]. It said individual clubs could reopen from 18 May provided safety protocols had been installed.

15 May 2020
CBS All Access Orders Captain Pike Star Trek Spinoff Series
And they're also working on an animated comedy show called Star Trek: Lower Decks that's expected to premiere later in 2020. For those Supernatural fans, Davy Perez will produce the series alongside Aaron Baiers , and Akela Cooper .

15 May 2020
English League Two clubs vote to end season
League One clubs have failed to agree whether to end the season early following discussions with the English Football League. With there still plans for the play-offs to take place as usual, with two-legged semi-finals and then a final.

15 May 2020
Top women's players to star as golf returns in South Korea
ET to rewatch golf from the 2016 Rio Olympics on our weekly show Olympic Games Replay. All players and staff would have their temperature checked before entering the venue.