Virus Puts Selling Pressure on Energy Markets
January 23rd, 2020
The energy market continues to feel selling pressure and the news of China banning travel from the City where the coronavirus started has added to the concerns and fears. The thought is the demand will be impacted negatively and allow supplies to grow more from their current levels. This will be a story to continue to impact the market and if things get worse that will not be positive for energy. China released a report stating that the virus has spread to 600 people and killed 17. There have been some reports that the virus in in the United States adding to the concerns of how far the virus has spread.
Oil banker, Bobby Tudor founder of investment bank Tudor Pickering, Holt & Company, has warned Houston oil investors that they will need to prepare for a “seismic shift” as climate changes pushes cleaner energy source to the front. Climate change was a big topic being asked at the World Economic Forum in Davos, Switzerland taking place right now and may have pushed news like this to the forefront.
Brazil is reported to discuss with Saudi Arabia the possibility of cooperation with OPEC and possibly becoming a member. India is supposedly talking with Brazil about this in hopes of buying more oil from Brazil.
The API inventory report released yesterday said the crude stocks were up 1.6 million barrels. Cushing crude oil stocks wee down 429,000 barrels. Gasoline stocks were up 4.5 million barrels and distillate stocks were up 3.5 million barrels. Estimates for today’s DOE number from the Reuters survey are for crude to be down 1 million barrels, gasoline up 3.1 million barrels and distillates to be up 1 million barrels.
EIA forecasted on 1-21-2020 in their monthly “Drilling Productivity Report” that US shale oil production from 7 major basin would increase by 20,000 bpd from January to February. This is the smallest rate of increase in in about a year but still production is near record highs. EIA raised their shale oil forecast up to 9.2 million bpd in the 7 major shale basins for January.
Propane inventory is expected to decline by 660,000 in today’s update. On average of the last five years this reporting week has a draw of 3.52 million barrels.