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Oil Market Suffering Continues

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There we go again, another negative week for oil amid a generally negative market sentiment and fortifying fears that oversupply is imminent in Q1 2019. Bullish factors that include supply disruptions in Lybia taking out some 400kbpd of production and the OPEC+ production cuts were overwhelmed by concerns regarding US crude production volumes, an unexpected US commercial crude stock buildup (API announced a 3.45 MMbbl increase) and a global economic slowdown.

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On Tuesday alone WTI witnessed a sharp 7 percent drop, whilst Brent decreased by 6 percent in one single day, making it one of the worst oil trading days of 2018. Crude prices have steadied a bit since then but it seems that the plethora of oil-related concerns will not allow for a quick recovery. On Wednesday WTI traded around 46.5-47 USD per barrel, whilst global benchmark Brent oscillated in the 56.5-57 USD per barrel interval.

1. Canadian Government Wants to Bail Out Producers (by Indebting Them)

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- The Canadian government announced a 1.6 billion CAD ($1.2 billion) aid package to assist struggling oil producers amid insufficient takeaway capacity and Alberta production curtailments.
- This would involve 1 billion CAD allocated to energy exporters to cope with the challenges of maintaing production and finding new market outlets, as well as 0.5 billion CAD worth of commercial financing, both granted mostly by loans.
-…

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