ANL 35.31 Decreased By ▼ -0.69 (-1.92%)
ASC 14.75 Increased By ▲ 0.05 (0.34%)
ASL 26.00 Increased By ▲ 0.30 (1.17%)
AVN 89.10 Decreased By ▼ -0.40 (-0.45%)
BOP 7.77 Increased By ▲ 0.03 (0.39%)
BYCO 10.05 Decreased By ▼ -0.03 (-0.3%)
DGKC 122.65 Decreased By ▼ -1.15 (-0.93%)
EPCL 58.20 Increased By ▲ 0.05 (0.09%)
FCCL 23.88 Decreased By ▼ -0.17 (-0.71%)
FFBL 28.75 Decreased By ▼ -0.40 (-1.37%)
FFL 15.63 Decreased By ▼ -0.12 (-0.76%)
HASCOL 9.60 Decreased By ▼ -0.05 (-0.52%)
HUBC 79.14 Increased By ▲ 0.39 (0.5%)
HUMNL 6.41 Decreased By ▼ -0.03 (-0.47%)
JSCL 20.80 Decreased By ▼ -0.40 (-1.89%)
KAPCO 39.90 No Change ▼ 0.00 (0%)
KEL 3.78 No Change ▼ 0.00 (0%)
LOTCHEM 16.60 Decreased By ▼ -0.08 (-0.48%)
MLCF 46.00 Decreased By ▼ -0.31 (-0.67%)
PAEL 35.56 Decreased By ▼ -0.09 (-0.25%)
PIBTL 10.34 Increased By ▲ 0.12 (1.17%)
POWER 9.28 Increased By ▲ 0.09 (0.98%)
PPL 85.90 Decreased By ▼ -0.33 (-0.38%)
PRL 24.72 Decreased By ▼ -0.18 (-0.72%)
PTC 9.90 Decreased By ▼ -0.01 (-0.1%)
SILK 1.26 Increased By ▲ 0.02 (1.61%)
SNGP 41.63 Decreased By ▼ -0.37 (-0.88%)
TRG 165.10 Increased By ▲ 1.80 (1.1%)
UNITY 30.40 Increased By ▲ 0.02 (0.07%)
WTL 1.56 Increased By ▲ 0.02 (1.3%)
BR100 4,874 Increased By ▲ 12.26 (0.25%)
BR30 25,700 Increased By ▲ 11.25 (0.04%)
KSE100 45,306 Increased By ▲ 75.45 (0.17%)
KSE30 18,538 Increased By ▲ 28.18 (0.15%)

Coronavirus
VERY HIGH
Pakistan Deaths
16,094
11224hr
Pakistan Cases
750,158
497624hr
Sindh
271,524
Punjab
264,010
Balochistan
20,760
Islamabad
68,906
KPK
104,480
Markets

Oil prices rise on stimulus package, fuel demand sinks

US Congress near deal on $2 trillion stimulus package Vitol sees oil demand down 15 million-20 million bpd
25 Mar 2020
  • US Congress near deal on $2 trillion stimulus package
  • Vitol sees oil demand down 15 million-20 million bpd
  • India in nationwide lockdown

NEW YORK: US crude prices rose slightly on Wednesday, bolstered by progress on a massive pending US economic stimulus package, but government data shows the coronavirus pandemic started to hurt US fuel demand last week.

Demand for oil products, especially jet fuel, is falling dramatically as governments globally announce nationwide lockdowns to slow the spread of coronavirus.

Fuel demand is expected to fall sharply worldwide in the second quarter with aviation largely at a halt and road travel severely curtailed. Most recently, India, the world's second most populous country and the third-largest oil consumer, entered a 21-day lockdown.

US weekly gasoline product supplied - a proxy for demand - dropped 859,000 barrels per day (bpd) to 8.8 million bpd last week, the biggest one-week decline since September 2019, according to the US Energy Information Administration. Overall fuel demand fell by nearly 2.1 million bpd for the week.

West Texas Intermediate (WTI) crude futures rose 55 cents, or 2.3%, to $24.56 a barrel, a 2.3% gain. Brent crude rose 40 cents to $27.55 a barrel, a 1.5% gain.

US senators and Trump administration officials have reached an agreement on a $2 trillion stimulus bill that Congress was expected to pass on Wednesday, helping to boost markets.

Although oil futures received a "sentiment-led boost this morning, the challenge for the physical oil market is a looming and growing oversupply which will cause a 'nowhere to hide' situation very soon", said Bjornar Tonhaugen, head of oil markets at Rystad Energy.

The chief executive of the world's biggest oil trader, Vitol Group, estimates a demand loss of 15 million to 20 million barrels per day (bpd) over the next few weeks.

The US energy sector is slashing capital spending and jobs, with capital expenditures at most shale companies expected to drop by at least 30%.

The outlook has turned "extremely pessimistic" amid the coronavirus pandemic, a survey by the Dallas Federal Reserve Bank of oil and gas companies showed on Wednesday. The Dallas Fed said its business activity index plunged from -4.2 in the fourth quarter to -50.9 in the first, the lowest reading in the survey's four-year history.

Crude inventories rose by 1.6 million barrels in the most recent week, the EIA said. Inventories, which have risen for nine straight weeks, are expected to keep growing as fuel demand declines and refineries pare back activity.

"We are entering into the single worst reset in energy prices in my lifetime," said one respondent.

Oil prices have fallen by more than 45% this month after OPEC+, comprising the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, failed to agree on extending output cuts.

"This reminds me of the aftermath of the 1998 price crash and what it did to our productive capacity for the next decade," said John Kilduff, a partner at Again Capital Management in New York.

"These busts like this can be long lasting in the oil industry."