Forex Marketz Daily Forex News – Fully Markets Update
Crude oil futures contracts, like the international Brent contract and the U.S. West Texas Intermediate (WTI) contract, inched higher during the Asian trade session on Thursday.
Oil traders are digesting a buildup in inventory levels in the United States which could indicate that producers have no other option but to cut output as demand for oil continues to decline thanks to the Covid-19 pandemic that is reducing global demand.
As of 1 am GMT, the international Brent crude oil futures contract, was up 69 cents to trade at $28.38 a barrel.
The U.S. West Texas Intermediate (WTI) crude oil futures contract added 56 cents or 2.8 percent to trade at $20.43 a barrel. The WTI contract fell, overnight during the North American trade session to its lowest price level since February 2002 and the Brent contract shed six percent.
According to official U.S. government data, released on Wednesday, inventory levels surged by a record level.
Crude Oil Traders monitor OPEC Production Levels
The Organization of the Petroleum Exporting Countries (OPEC) and non-member states led by Russia, collectively known as the OPEC +, have agreed to reduce output by 9.7 million barrels per day starting the first of May.
Traders are looking for other countries like the United States, Canada and Norway to cut production by ten million barrels per day bring the entire reduction in pumping lower by 20 million barrels per day.
Oil Traders Digest a Rise in U.S. Inventory Stockpiles
The U.S. International Energy Agency (IEA) released overnight that demand for the black gold will fall by 29 million barrels per day in April. This is its lowest level in a quarter of a century. This is just below 30 percent of the global demand for oil before the Cpvid-19 pandemic.
The IEA said that for last week that U.S. production is expected to contract by 470,000 barrels per day. There are some countries that will buy from their strategic stockpiles but there is only a limited amount of oil that can be bought right now. This will cap gains.
