On Thursday, oil prices lost around USD1/barrel as the slumping demand due to the global lockdown caused by coronavirus offset the hopes of economic recovery from the US USD2 trillion stimulus.
US WTI crude oil futures settled at USD22.60/barrel, down by 7.7% or USD 1.89/barrel. Likewise, Brent crude futures also fell by 3.8% or USD1.05/barrel to settle at USD26.34/barrel.
The US government just cancelled the plan of buying domestic oil for its Strategic Petroleum Reserve (SPR) as the funding was not included in the broader stimulus package.
Analyst Bob Yawger of Mizuho commented, “For WTI, there was a certain assumption that it was going to happen so you had that backstop, to a certain degree, that didn’t exist for the international benchmark."
On Friday, the US House of Representatives (HOR) is planned to vote on the USD2 trillion stimulus package passed on by the Senate.
The stimulus package, however, did little change to market player's worry on the pandemic impact.
The International Energy Agency (IEA) estimated the global oil demand to fall by up to 20% or 20 million bpd as many countries are imposing lockdown to limit the spread of coronavirus.
The oil market share war between Saudi Arabia and Russia is raising the prospect of supply glut in the middle of weakening demand.
