Virus Cases up = Crude Demand Down!

LQM Weekly Report October 19 2020

 

Crude had a mixed week, however Brent is up $1/bbl since last Monday. With the number of virus infections increasing around the world, there are concerns as to whether demand can be sustained. In a recent statement from the International Energy Agency, demand outlook was described as being fragile due to the pandemic and we could see the price dropping due to this. Saudi and Russia have been talking about OPEC+ production cuts over the last week, and a larger ministerial meeting, that will decide the coming direction of potential output cuts is scheduled for Nov. 20 – Dec. 1. There is an online meeting today to review compliance with the current agreed cuts.

In the US, the recent number of daily virus infections has been above 50,000 for the past 5 days. Meanwhile, the number of infections in Italy has increased to a new daily record. Recent restrictions across Europe have seen both London and Paris tighten restrictions on movement. In Switzerland masks have been made mandatory in all public venues.

Singapore is tight about 7 days out. Fujairah has improved and only 3 days out now for barging. There is a potential Typhoon building off the East Coast of the Philippines which could cause problems there, as well as Southern China and Vietnam over the next week, if it continues to develop. Delivery in the Med is tight for HSFO at Malta, while most other ports are looking 5-6 days out to get good pricing. NEW and Baltic looking the standard 5 days out. Houston and New Orleans avails remain strong with some suppliers able to offer prompt. Panama avails are good with suppliers looking for about 5-7 days notice.

 

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