Oil market demand destruction due to lockdowns is significant, with estimates of 20mb/d. Further, the price war between Russia and Saudi Arabia continues, strategists at ANZ Bank inform.
Key quotes
“We calculate world crude oil demand has fallen by about 20mb/d, which makes the supply side issues largely irrelevant.”
“We suspect with the lack of available storage, supply will start being shut down if this level of demand destruction continues. That doesn’t bode well for the oil price in the short term.”
“The market is expecting a production increase from Saudi Arabia; so we expect lower prices for longer.”
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