By Justice Derefaka (Technical Adviser on Gas Business and Policy to the Honorable Minister of State for Petroleum Resources)
Crude oil prices eased slightly on Thursday but held most of their gains from the previous session after U.S. government data showed a fall in inventories, supporting the view that fuel demand is returning despite the coronavirus pandemic. U.S. crude oil, gasoline and distillate inventories fell last week as refiners ramped up production and demand improved, a government report showed.
However, Oil prices advanced and were heading for a another week of gains amid growing confidence that demand for fuel is starting to pick up despite the coronavirus pandemic that has slammed economies worldwide.
Still, the International Energy Agency has reduced its oil demand forecast for this year, and said lower air travel due to the COVID-19 pandemic would cut global oil consumption this year by 8.1 million barrels per day (bpd).
The Organization of the Petroleum Exporting Countries (OPEC) said earlier this week that world oil demand is likely to drop by 9.06 million bpd this year, a bigger decline than the 8.95 million bpd decline expected a month ago.
Sales continued to be largely quiet as sellers and buyers refused to budge on prices, but demand in Europe justified some offers which remained steady.
* Traders said last week’s heavy buying largely satisfied demand for September-exporting cargoes, but that some short-term demand remained especially in Europe, where vehicle mobility has outstripped other regions.
* Refining margins there remain largely poor, making buyers reluctant to meet sellers consistently high prices.
* Despite higher prices for low sulphur fuel oil, prices for medium to heavy West African grades have suffered recently due to weak Asian buying, the International Energy Agency noted this week, citing Nigerian Forcados and Angolan Cabinda.
Prices are as follows:
(1)Dated Brent =$45.06 / bbl (-0.035)
(2)Bonny Light =$44.435/bbl (-0.175)
(3)QuaIboe =$44.235 /bbl (-0.175)
(4)Forcados =$44.585 /bbl (-0.175 )
Premium unleaded pms= $403/mt (2.25)
0.1% Gasoil= $372.25/mt (-1.75)
Clean Tanker freight UKC-WAF= $16.68/mt (0)
Stay Safe and have a wonderful week.