Crude Oil Report: Hopes for a truce in Saudi-Russia price war
Reuters: Crude oil futures jumped nearly 5% in early trading on Thursday after U.S. President Donald Trump said he expected Saudi Arabia and Russia to reach a deal in the next few days to end their oil price war.
Trump said at a news conference the oil industry had been “ravaged”, with oil prices having plummeted to 18-year lows amid a battle for market share between Saudi Arabia and Russia and fuel demand being slammed by the coronavirus pandemic. He said he expected the pair would “work it out over the next few days” after talking to both countries’ leaders.
“It’s very bad for Russia, it’s very bad for Saudi Arabia. I mean, it’s very bad for both. I think they’re going to make a deal,” he told reporters at the White House.
He also said he would be meeting with oil executives, where he is expected to discuss a range of options to help the industry amid the sharp hit to demand as the coronavirus outbreak has hammered industrial activity and kept cars off the road.
U.S. crude stockpiles rose 13.8 million barrels in their biggest weekly increase since 2016.
On the other side according to the Bloomberg’s Survey; Oil Demand in April is likely to decrease:
About 70% of Bloomberg Intelligence’s 130 survey respondents see Brent below $30 by June, prior to OPEC’s next meeting. With the world’s biggest economies in lockdown due to Covid-19 and Brent at a 17-year low, a near-term recovery seems unlikely as demand remains in free-fall and Saudi Arabia and Russia entrench supply dominance.
Another important issue about the medium term projections: While the crisis will see the energy industry finally achieve the restructuring it so badly needs, according to Goldman, the push for de-carbonization could hinder its recovery when demand returns.
WSJ: Saudi Arabia is ramping up its oil output, boosting production capacity and hiring new tankers to fight its price war with Russia, despite the coronavirus pandemic’s erosion of demand for crude.
The world’s biggest oil exporter is producing above 12 million barrels a day, at maximum capacity, and about two million barrels a day more than a month ago, Saudi officials said.
There are signs that some of this extra oil has virtually no place to go. Some of the vessels the kingdom has hired to help it increase exports are leaving ports filled with oil, but have no destination, casting doubts on whether the extra production will end up with customers and add to a global glut.
“There are loadings [from Saudi ports in the Persian Gulf] with no destination on them because we don’t have buyers,” a Saudi official said.
We have achieved our 20$ target which we have started to sell at 64$.
On the smaller charts,
We may see a retracement towards 25 $ – triggered by the news of Trump’s hope for a deal – if the prices break above the 22 $ resistance.
Our trade plan is to sell WTI Crude Oil at 23.40 – 24.00 $. Our target is 19.00 and 16.05.
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