Crude Oil Prices as at
AM 26/ 06/2020
Oil prices rose on optimism about a recovery in fuel demand worldwide, despite a surge in coronavirus infections in some U.S. states and signs of a revival in U.S. crude production.
Optimism about recovering fuel demand worldwide has been supportive of prices despite an increase in total coronavirus infections worldwide and amid signs that U.S. crude production from shale would grow.
Analysts said satellite data showing a strong pick-up in traffic in China, Europe and across the United States pointed to an improvement in fuel demand.
Congestion in Shanghai in the past few weeks was higher than in the same period last year, while in Moscow traffic was back to last year’s levels, data provided to Reuters by location technology company TomTom showed.
However, there are fears a spike in COVID-19 infections in southern U.S. states could stall the demand recovery, especially as some of those states, such as Florida and Texas, are among the biggest gasoline consumers.
The global economic outlook has also worsened or at best stayed about the same in the past month, a majority of economists polled by Reuters said, and the recession underway is expected to be deeper than earlier predicted.
A sharp improvement to European gasoline cracks could soon lead to an uptick in demand for Nigerian crude, traders said, but differentials remained steady on high storage and mostly bad margins.
* Increased mobility helped send European gasoline cracks higher and provided a boost to sellers of Nigerian oil.
* Still, sold prices for lighter Nigerian crude grades Qua Iboe and Bonny Light have yet to exceed around dated Brent plus a dollar in recent days, as European gasoline stocks have slipped but remain near all-time highs.
* Raised official selling prices by about $1.30 for these grades in July compared to June are realistic, according to one trader, though the destocking in Europe may take a while before new demand can kick in.
* A tender from Taiwan’s CPC for sweet crude was likely awarded to a shipment of WTI Midland oil and not West African, but traders awaited results for Thai oil refiner IRPC which also issued a tender for sweet crude valid until Wednesday.
Prices are as follows:
(1)Dated Brent =$41.01/ bbl (0.555)
(2)Bonny Light =$40.590/bbl (0.55)
(3)QuaIboe =$40.740 /bbl (0.65)
(4)Forcados =$40.89 /bbl (0.55)
Stay Safe and have a wonderful week