This morning, WTI prices fell below $ 40 after an unexpectedly large increase in oil prices reported the API overnight., as concerns about the second wave of COVID-19 (and possibly blocking) block hopes for a recovery in demand amid record stocks.
Although “the focus is on inventory data,” there is also ongoing concern about the growing pandemic, said Hans van Cleef, senior energy economist at ABN Amro.
“Hopes for increased demand are balanced by concerns about the new distribution of Covid-19.”
As Bloomberg notes, Concerns about trade also pushed the market, given that the US is considering $ 3.1 billion in new export tariffs from France, Germany, Spain and the UK, adding to the arsenal of measures against the European Union that could escalate into a wider transatlantic trade struggle later this summer.
Crude + 1.749 mm (+ 1.5 mm experience, Platts -100k experience)
Gasoline -2.605 mm (-1.9 mm experience)
Distillate -3.856 mm (+ 100 thousand experience)
Crude + 1.44 mm (+ 1.5 mm experience, Platts -100k experience, BBG WHIS -595k experience)
Gasoline -1.673 mm (-1.9 mm experience)
Distillates + 249K (+ 100K experience)
EIA official data confirmed that the API reported an increase in oil stocks last week, as well as the smallest draw at Cushing since May. Distillate components also pour cold water on any consumption of jet fuel or diesel fuel.
The demand for gasoline is also closely monitored as an indicator of the speed of economic recovery, and the demand for jet fuel remains low …
US oil production fell last week due to Cristobal storm closures, and this drop was erased last week, to 11.0 mm b / d …
WTI briefly traded above $ 40, but fluctuated around $ 39.50. Before the publication of DOE and fell to a minimum of a day after the data …
There are also signs that some funds may be withdrawn. Following the trend, funds that follow technical signals are approaching levels where they could change their current bull positions, according to Keith Wildie, senior commodity broker at R.J. O’Brien.
Vince Piazza, senior energy analyst at Bloomberg Intelligence, notes that the risk of oversupply is still a concern, and we believe that commodity markets are not fully aware of the risk of a second wave of Covid-19 infections that reduce demand.