Oil: Crude could see additional pain – TDS
OPEC’s doubts to add production curbs alongside a possible Libyan oil production resumption might bring additional losses to the crude oil, according to strategists at TD Securities.
“Hopes that we have reached 'peak coronavirus' fear is catalyzing a round of risk-on trading, which is helping crude find a floor.”
“In OPEC's view, the disruption could only amount to some 230k bpd annualized of global oil demand. Meanwhile, OPEC+ is hesitating on adding to existing production curbs given the limited disruption in Russia's domestic energy exports, with energy-time spreads sending strong signals of oversupply.”
“WTI and Brent Dec-Dec spreads are flirting with contango as the market prices in the oversupply narrative. The prospect of no OPEC+ action until the March meeting, along with a possible resumption of nearly 1m bpd of Libyan oil production should peace talks prove successful and refinery maintenance season just getting under way all suggest that crude markets could see some additional pain.”