FXEMPIRE
All
Corona Virus
Stay Safe, FollowGuidance
World
6,681,747Confirmed
392,017Deaths
3,227,987Recovered
Fetching Location Data…
Advertisement
Advertisement

Oil Price Fundamental Daily Forecast – Bearish API Report, OPEC Rift Weighs on Prices

The fundamentals are bearish. The only factors that could drive prices higher at this time are a dramatic flattening of the coronavirus curve and an agreement between Russia and Saudi Arabia to call off the price war.
James Hyerczyk

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower on Wednesday after posting their biggest-ever quarterly and monthly losses in March. The catalysts behind the selling pressure are a bigger than expected build in U.S. inventories and a widening rift within OPEC. Demand destruction caused by the economic impact of the coronavirus pandemic is also fueling oversupply fears.

At 09:34 GMT, May WTI crude oil futures are trading $20.24, down $0.24 or down 1-1.03% and June Brent crude oil futures are at $25.10, down $1.25 or -4.78%.

American Petroleum Institute Weekly Inventories Report

The API reported late Tuesday that U.S. crude oil inventory rose 10.485 million barrels during the week-ending March 28, as 75% of Americans remain under lockdown in some form or another. Analysts were looking for a build of 3.997 million barrels.

The API also reported a large build of 6.085 million barrels of gasoline for the week-ending March 27 after last week’s 2.622 million barrel draw. Analysts had estimated a 1.949 million barrel build for the week.

Distillate inventories were down by 4.458 million barrels for the week, compared to last week’s 1.90 million barrel draw for the week. Cushing inventories rose by 2.926 million barrels.

Advertisement

OPEC Members Fail to Set April Meeting

In addition to the bearish tone set by the increased supply, Saudi Arabia and other members of OPEC were unable to come to an agreement on Tuesday to meet in April to discuss sliding prices.

A rift in OPEC has widened after members failed to agree unanimously on an emergency low-level meeting to discuss a market collapse that has seen global oil prices hit 18-year lows.

OPEC president Algeria, which has been instrumental in organizing the producer group’s efforts to support the market, had been among the members pushing for a gathering of OPEC’s Economic Commission Board (ECB) in April.

But at least four members, including OPEC’s de facto leader Saudi Arabia, the United Emirates, Kuwait and Nigeria, have made clear they see no need for such a meeting, four sources with knowledge of the matter said on condition of anonymity.

One OPEC source said Kuwait had not received an official invitation to join the meeting, and does not consider a meeting necessary.

Another OPEC source said it was best to stick to a previous arrangement to hold the ECB meeting in June rather than earlier given the extent of uncertainty over the market’s direction.

Daily Forecast

The fundamentals are bearish. The only factors that could drive prices higher at this time are a dramatic flattening of the coronavirus curve and an agreement between Russia and Saudi Arabia to call off the price war.

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

Latest Articles

See All

Expand Your Knowledge

See All

Trade With A Regulated Broker

  • Your capital is at risk