WEEKLY ENERGY RECAP: Demand recovers

Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, US. (Reuters)
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Updated 17 May 2020

WEEKLY ENERGY RECAP: Demand recovers

  • The physical crude market was still weighed down by millions of barrels stored on tankers worldwide

Brent finished at $32.50 per barrel capping a third consecutive week of gains while WTI topped $29.43 per barrel which was close to a two-month high.

The Brent/ WTI spread has narrowed significantly to $3.07 per barrel, which makes US crude oil exports less competitive to other Brent-related Atlantic basin barrels.

Oil gained despite bearish uncertainties surrounding COVID-19 as economic uncertainty kept market sentiment cautious.

The physical crude market was still weighed down by the millions of barrels being stored on tankers worldwide.

There are more than 200 million barrels of crude oil and petroleum refined products in floating storage as reported by S&P Global Platts.

Still, the crude oil demand outlook is improving as governments ease lockdown measures.

Strong signs of compliance with OPEC+ supply cuts added to the improving market sentiment, especially with large produces within OPEC having already deepened June output cuts which could yet be extended further.

This was in addition to hefty output cuts from producers outside OPEC+ from the US, Canada, Brazil and Norway.

The US rig count continued to fall for the ninth consecutive week, dropping by 34 to 258 rigs, which implies a further imminent decline in the US crude oil production.

China refining capacity posted the first uptick since the coronavirus outbreak after increasing to 13.16 million bpd in April. It is expected to further increase during May and June as the country begins to emerge from a months-long lockdown.

This has given oil traders some hope that demand will begin to recover over the coming weeks keeping in mind that China is
the largest crude oil importer in the world.

The oil demand outlook has improved, particularly in Asia, driven primarily by rising gasoline consumption as citizens get back in their cars.


Abu Dhabi fund suspends debt service repayments for countries, companies

Updated 12 July 2020

Abu Dhabi fund suspends debt service repayments for countries, companies

  • Debt service repayments would be suspended for eligible countries and individual companies from Jan. 1 until Dec. 31

DUBAI: Abu Dhabi Fund for Development has suspended debt service repayments for some countries and companies for the year, the state-financed fund said on Sunday.
The fund provides financial assistance to companies in the United Arab Emirates and to developing countries, which has included Pakistan, Egypt, Sudan and Ethiopia.
Debt service repayments would be suspended for eligible countries and individual companies from Jan. 1 until Dec. 31, the fund said in a statement.
It did not say which countries or companies would benefit or what the criteria would need to be met to be eligible.
“At a time when the world is reeling under the effect of the pandemic ... it is imperative for us to support particularly those that need it most, especially the low-income countries,” the fund’s director general Mohammed Saif Al-Suwaidi said.