Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
Vladimir Zernov
WTI Crude Oil

Oil Video 16.10.20.


OPEC+ Believes That Demand Is Recovering Slower Than Expected

Yesterday, OPEC+ technical committee met to discuss the latest developments. According to reports, OPEC+ discussed how weaker oil demand outlook, surging coronavirus and increasing production in Libya could impact oil prices.

Know where WTI Crude Oil is headed? Take advantage now with 

75% of retail CFD investors lose money

OPEC+ thinks that the current demand recovery is not as robust as previously expected. The main problem is the second wave of the virus which has already forced various countries to implement additional virus containment measures.

The increase of oil production in Libya is another worrisome development for the oil market. Libya, which is torn by a civil war, does not have to comply with any production quotas and aims to increase its oil production as fast as possible.

The key question is whether OPEC+ will decide to maintain current production cuts beyond this year. In recent days, Russia and UAE indicated that they were willing to increase production as planned in 2021 despite the second wave of the virus.

However, it looks like OPEC+ decision will be dictated by the state of the world economy in December 2020, and current statements from OPEC+ members may differ from their final decision.

U.S. Gasoline Demand Declines to 8.58 Million Barrels Per Day

EIA reported that U.S. gasoline demand declined from 8.9 million barrels per day (bpd) to 8.58 million bpd. A year ago, U.S. gasoline demand was 9.35 million bpd, so the current demand is lower by 0.77 bpd.

Gasoline demand quickly recovered from the lows reached at the peak of the crisis but this recovery stalled in recent weeks. At this point, gasoline demand stabilized at levels that are well below the levels seen in 2019.

Most likely, additional recovery of gasoline demand will require material improvements on the coronavirus front. Currently, the number of new daily cases in the U.S. is rising, and it’s hard to expect material progress on this front in the upcoming weeks.

Interestingly, oil traders have managed to shrug off coronavirus fears so oil has settled above the $40 level. The recent inventory report has clearly provided additional support to the market. However, continued demand recovery is necessary to push oil prices to higher levels.

For a look at all of today’s economic events, check out our economic calendar.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.