Not sure if anyone saw weekly oil demand report in US
2 weeks ago 15.7
Last week 15.4
This week 16.8 !
Last year 19.5
But massive growth week on week and demand in the US is now down less than 15%. Extrapolating globally to global demand of 100m gives the 15m demand cut you would have heard, but not all economies are as demand elastic to oil as US consumers - to them it is more a necessity. So would assumes demand destruction much less than 15m.
On supply side oil was 11.6 v 11.9 last week, v high of 13.2m
So US has cut production 1.6m, Opec have cut 10m this month, and Saudi cutting more. There is also non OPEc cuts too (Mexico, Canada).
Yesterday was expiry for June contract (When May contract expired we had negative oil prices). That it's rolled over smoothly is also encouraging - means no one took more ownership of more oil than they could manage.
I think we will see $30 Oil tonight, or by early week.
That demand growth for oil was very positive, and that represents week ending 8th May (EIA report a week later). So current oil demands is very likely even higher in the US and will only increase as their restrictions kick off.
For those concerned about jet fuel (aviation) - global aviation oil demand is only 8m. not that material.
And if ppl can't fly in the US, they will drive - which is less efficient. I think the impact of demand/supply is not actually being accurately reflected in current prices.
I expect $30 in the next few days and it to get to $40.
If we can survive ch11 there is light, I just hope we get to that light (And a 10-1 reward or more) before our debt consumes us
SEA Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held
