Oil prices stutter as fears that the impressive global oil demand snap-back with a stall as the Covid-19 continues to challenge the global economy. In the U.S., confirmed cases of Covid-19 are now over 3.5 million and with growing.
OPEC’s Joint Technical Committee is trying to thread the oil needle by increasing oil production but not crash the global oil market price. While some fear that any production increase in global output will end the most significant oil price recovery on record, the reality is data shows that very soon, the world is going to need more oil.
The international trade in LNG has collapsed, squeezing an important outlet for U.S. shale gas. A snap-back in gasoline demand in yesterday’s weekly EIA report offset concerns about a build in U.S. crude oil supplies.
Fed actions, along with OPEC plus cuts that are going to reduce supply along with the historic drop in U.S. oil production, will set the stage for higher prices and better demand for oil. They slightly raised their forecast for production based on a forecast for a higher price.