Oil Closes Under $20 for Second Day Amid Historic Demand Loss - Bloomberg:
Oil closed under $20 a barrel for a second day as projections that demand will fall to a 30-year low outweighed an agreement by the world’s biggest producers to curb supply.
Futures in New York ended the day unchanged from the 18-year low set Wednesday. OPEC said it expects demand for its crude to fall to the lowest in three decades as the coronavirus outbreak freezes the global economy, underscoring the urgency of the group’s promised production cuts. OPEC and its allies have agreed to curb output by 10% next month. But even with full compliance, the group would still be pumping more than the market requires in the second quarter.
The cuts “certainly aren’t going to be near enough to balance the market,” said Bart Melek, head of commodity strategy at TD Securities. “There is a good chance, that over the short run, we might even be lower here.”
Inventories from America to Europe and Singapore have all ballooned this week, sending some localized crude prices below $10 a barrel. The glut is looking so severe that the Trump administration is considering paying American companies to leave crude in the ground.
Oil closed under $20 a barrel for a second day as projections that demand will fall to a 30-year low outweighed an agreement by the world’s biggest producers to curb supply.
Futures in New York ended the day unchanged from the 18-year low set Wednesday. OPEC said it expects demand for its crude to fall to the lowest in three decades as the coronavirus outbreak freezes the global economy, underscoring the urgency of the group’s promised production cuts. OPEC and its allies have agreed to curb output by 10% next month. But even with full compliance, the group would still be pumping more than the market requires in the second quarter.
The cuts “certainly aren’t going to be near enough to balance the market,” said Bart Melek, head of commodity strategy at TD Securities. “There is a good chance, that over the short run, we might even be lower here.”
Inventories from America to Europe and Singapore have all ballooned this week, sending some localized crude prices below $10 a barrel. The glut is looking so severe that the Trump administration is considering paying American companies to leave crude in the ground.
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