US Oil Exports are on decline since the Covid-19 Crisis

 

us oil exports

Global oil prices are to seesaw around $40.00 a barrel for some time owing to yet another supply glut.

The EIA, the US Energy Information Agency, reports a steady decline in US exports since February, which can only indicate a fall in global demand in proportion.

Since producers are beginning their activities, even at a slower pace, that can only mean the expansion of the supply side of the equation; for most, if not all, of them, it’s a matter of stay relevant in the sector in the long run.

The burden on the supply side that weighs on the market did get little help from the news that China has slowed down oil imports – a far cry from its inventory building spree in April-May period.

In India, meanwhile, the demand in diesel has fallen rapidly as coronavirus infections go up unabated. Even India that saved above $685 million with its accelerated oil stock building may see little enthusiasm to expand the activities on this front, due to both logistical reasons and demand concerns.

The anticipated input of oil from Libya and Iraq, in addition to that will come from new players in the field from Africa, could potentially push the supply level up by a few notches in the coming months.

In anticipating the crisis of crude oil price, the OPEC+ may be compelled to introduce yet another production cut; based on the ground realities, however, the top members know it is easier said than done.

In these circumstance, only a breakthrough in dealing with the coronavirus can stimulate a desirable upward trend in the oil markets; the  rest is just wishful thinking.

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