WTI Back Above $50 After Smaller Than Expected Crude Build
Oil prices roundtripped overnight after running back above $50 following the smaller-than-expected API-reported crude build, sliding back lower overnight, and ramping back to $50.00 ahead of the official government data thanks to promises from OPEC+ that they will meet, despite the virus concerns:
“The OPEC secretariat is in contact with the authorities in the city of Vienna on the recent reported cases of infections in Austria,” Secretary-General Mohammad Barkindo says while returning from meeting in Riyadh. “While we continue in earnest with the preparations for the meetings of the extraordinary conference next week, we are continuing to monitor developments closely”
‘There will be blood’ comes to mind.
Additionally, Bloomberg Intelligence Senior Energy Analyst Vince Piazza says E&Ps have professed heightened capital discipline in 2020, which should slow oil-production growth in the U.S and help tighten balances. But global demand remains a broader concern, with the fears of the coronavirus spreading even as oil exports from the U.S recovered recently.
Crude +1.3mm (+2.8mm exp)
Gasoline +74k (-1.9mm exp)
Distillates –706k (-900k exp)
Crude +452k (+2.8mm exp)
Gasoline –2.691mm (-1.9mm exp)
Distillates –2.115mm (-900k exp)
The official crude inventory data showed an even smaller build than API (and notably less than expected)
The gasoline draw is far greater than that predicted by API on Tuesday. National stocks are down 2.69 million barrels to 256.39 million barrels — but even with the draw they are still near a seasonal five-year high.
US Crude production remained at record highs as the rig count has stabilized…
WTI has surged back above $50, back towards overnight highs on the smaller than expected crude build…
President Rouhani Blames America For “Spreading Fear” About Iranian Coronavirus Outbreak
The Iranian regime is not having a good year.
In January, the IRGC and military tried to cover up the accidental ‘shoot-down’ of a Ukrainian passenger plane packed with young Iranian students. In February, it tried to cover up an outbreak of the coronavirus, and inadvertently allowed several senior health officials to become infected, including a deputy health official who appeared on Iranian TV looking like he was about to drop dead.
He was later confirmed to have the virus. We covered this extensively yesterday.
On a scale from 1 to Your Government Is Absolutely Not Up To The Task, the deputy health minister literally appearing at a coronavirus press conference in a fever sweat, because he has coronavirus, ranks right up there https://t.co/dlvO45LurJ
Following rumors that the Ayatollah himself may have been exposed to the virus, President Rouhani appeared on TV to accuse the US on Wednesday of inciting “fear” in Iran over the deadly outbreak.
Sorry, Mr. President, but we suspect your government’s botched response is really to blame.
“We shouldn’t let America mount a new virus on top of coronavirus that is called…extreme fear,” Rouhani told a weekly cabinet meeting, a day after US Secretary of State Mike Pompeo accused Iran of suppressing information about the outbreak.
Rouhani also dipped into conspiracy theory, accusing the US of covering up the outbreak by labeling thousands of cases as the common flu.
The Americans “themselves are struggling with coronavirus. Sixteen thousand people have died of influenza there but they don’t talk about their own (dead),” Rouhani said.
Iranian authorities have closed schools, universities, cultural centers, sporting events and deployed teams of sanitary workers to disinfect buses, trains and public spaces as the outbreak unleashes a full-blown hysteria.
However, something tells us their approach to containing the virus hasn’t been as effective as they had expected.
No joke: #Irani nurses sterilize “Rouhani Hospital” in Mazandaran province of Incense to counter the Corona virus. There has been several cases of corona virus 🦠 in Iran 🇮🇷 lately .. pic.twitter.com/VIRYeiGbvi
Well, CNBC’s Markets in Turmoil failed to spark its typical boost to equities as stocks continued their selloff yesterday as fears over coronavirus continue to rattle investors’ confidence.
The Dow Jones Industrial Average has now lost 6.59% over the last two days, its worst two-day loss since February 2018. The S&P 500 has lost 6.28% over the last two days, wiping out $1.737 trillion in market value, marking the worst two-day stretch since August 2015. Lastly, the Nasdaq has lost 6.38% over the last two days, marking the worst two-day stretch since June 2016.
One of the more obscure stats to take note of is the S&P 500 closed down more than 2.5% for consecutive sessions while above its 200-day moving average for the first time since 1938.
More than 64% of S&P 500 companies have entered a correction, meaning they’re down at least 10% from their 52-week highs, while 25% of S&P 500 companies have entered a bear market, meaning they’re down at least 20% from their 52-week highs.
Interestingly, U.S. President Donald Trump — who doesn’t watch the stock market, is reportedly “furious” the markets have been selling off. The Washington Post reported he has warned aides against discussing the impact of coronavirus over fears that stocks may continue to fall.
Officials at the Center for Disease control appear to have concluded it’s only a matter of when, not if, coronavirus spreads throughout the U.S.
“It’s not so much a question of if this will happen anymore but rather more a question of exactly when this will happen and how many people in this country will have severe illness,” Dr. Nancy Messonnier, the head of the National Center for Immunization and Respiratory Diseases at the Centers for Disease Control and Prevention, said.
Meanwhile Gilead Sciences has begun a clinical trial of its drug remdesivir on a patient hospitalized with COVID-19, marking the first clinical trial in the U.S. to find a treatment for coronavirus. The participant is an American who was quarantined on the Diamond Princess cruise ship in Japan and volunteered to participate in the study.
“We urgently need a safe and effective treatment for COVID-19. Although remdesivir has been administered to some patients with COVID-19, we do not have solid data to indicate it can improve clinical outcomes,” said NIAID Director and U.S. Coronavirus Task Force member Anthony S. Fauci, M.D.
It’s anyone’s guess where markets go from here.Unlike other issues that have popped up during this bull market, a deadly virus sweeping the globe is not something that central bankers can easily overcome by printing money or cutting interest rates.