Petroleum Daily Report

A major and historic US stimulus bill was just signed into law today, and as a whole, we are now almost out of ammunition. Financial markets are pretty much on their own next week. Oil prices fell again today, un-phased by the stimulus bill passing as demand destruction continues to be the main factor. Both contracts are down roughly 2/3 YTD and with 3 billion people in lockdown, global oil requirements could drop by an additional 20%. “We have our doubts about whether Saudi Arabia will allow itself to be persuaded so easily to return from the path of revenge that it only recently embarked upon,” said Commerzbank analyst Eugen Weinberg. As global oil demand plummets, Saudi Arabia is struggling to find customers for its extra oil, undermining its bid to seize market share by expanding production. Besides, with Brent falling below the level of those initial Saudi price cuts, they will likely have to cut those even further to stay competitive, creating a downward spiral. Traders say Russia has been able to redirect its European sales to China—where demand is slowly recovering. WTI traded down $1.09 or -4.82% to close at $21.51. Brent traded down $1.41 or -5.35% to close at $24.93

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