Business Heating oil prices drop to a new long-term low

Heating oil prices drop to a new long-term low

International market

The oversupply on the global oil market initially remains high. Oil prices are moving sideways, accompanied by slight fluctuations. According to the EIA, around 10.1 million barrels a day (B / T) find no buyers in the current month. In its current monthly report, the US energy agency also assumes that the OPEC cuts in April were only 4 million B / T compared to the previous month. There is a huge gap to the 10 million B / T that the OPEC + Group would allegedly throttle.

The preliminary data on the weekly development of the oil reserves in the USA also do not show any further upside potential for oil prices. The American Petroleum Institute’s (API) report released last night failed to meet market participants’ expectations that inventories would grow much more slowly than before. The utilization of storage capacities had become an urgent problem in April. This has calmed down somewhat since the stocks are now filling up more slowly, but a turnaround is not yet in sight with the available figures. For a more precise assessment of the situation, traders are eagerly awaiting the official data from the Department of Energy (DOE), which will be presented in the afternoon.

The fact that the EIA now expects the market to recover more quickly has a stabilizing effect on oil prices. For example, it has largely raised its price forecasts for 2020. The agency expects a balanced market as early as June. The prerequisite for this is that the economy picks up after the easing of measures to contain the corona pandemic. A possible second wave of infection remains a risk. Clear indications of this would send oil prices downwards immediately.

Quotes on the oil exchanges start at different levels this morning. West Texas Intermediate (WTI) rose, while Brent remained at a similar level. The barrel of the US crude oil grade WTI currently costs $ 25.52