WTI prices are drifting lower on Friday after posting a volatile trade all week. Reports from the IMF, IEA and OPEC all centered on the same theme. The proper steps were made by the experts at the start of the pandemic to stabilize prices, but more is going to have to be done to take the global economy to the next level. Furthermore, governments are going to have to control the pandemic or the energy sector could face further destruction.
The experts all seem to agree that the fiscal and monetary stimulus thrown at the global economy in April, gave false hope of a quick recovery. It now looks like the world is going to need further stimulus or the global economy may take two steps backward, putting further pressure on prices.
Expectations of Further Demand Destruction
European nations are reviving curfews and lockdowns amid the growth in new coronavirus cases, leading to predictions of more demand destruction in the energy markets. India, which is on track to overtake the U.S. with the world’s most COVID-19 infections, is bracing for a surge of cases in coming weeks as it heads into its main holiday season. The country is the world’s third-biggest oil user, according to Reuters.
American Petroleum Institute Weekly Inventories Report
The American Petroleum Institute (API) reported on Wednesday a major draw in crude oil inventories of 5.421 million barrels for the week-ending October 9. Analysts had predicted a build of 400,000 barrels.