Daily Energy Report
Crude Oil Futures for April 2020 settled up $4.85 @ $25.22/bbl trading in a $6.35 range including the overnight-RBOB settled up 4.73/cpg and Heating Oil settled up 8.75/cpg.
With travel restrictions and quarantines accelerating, energy analysts are currently scrambling to downgrade their oil demand forecasts. Goldman Sachs now expects 2020 oil demand to shrink by -1.1 million barrels per day, hitting the low in March when demand could plunge by -8 million barrels. Rystad Energy is even more pessimistic, calling for a plunge of -2.8 mil/bpd in 2020. That’s more than four-times the energy firm’s previous call for a drop of just -600,000/bpd. April demand alone is likely to nosedive by 11 million barrels per day, Rystad said. According to leading industry advisors, the velocity of the upcoming inventory builds is now certain to overwhelm the ability to store the fuel.
Natural Gas Futures for April 2020 settled up $0.050 @ $1.654/mmbtu trading in a .081 cent range including the overnight session.
After laying off thousands of workers and sidelining equipment, U.S. shale producers are moving to slash executive pay as they deal with the dramatic oil price collapse. So far, shale firms this month cut 25% to 50% of planned spending, as a freefall in demand from Coronavirus and a price war between Saudi Arabia and Russia have thrown the energy markets into a tizzy. Advisors are quick to note: the shale industry was already under pressure following a decade of dismal investor returns and looming restructuring. U.S. oilfield services provider Halliburton Co said on Tuesday it will furlough about 3,500 employees in Houston for 60 days as its customers continue to decrease spending. This mornings weekly EIA natural gas storage report showed a draw of -9 bcf for the week.