some comments on energy markets from the ANZ commodities team...

some comments on energy markets from the ANZ commodities team this morning:

Warnings of weaker demand cast a pall over crude oil markets. The International Energy Agency said that the re-balancing of the global oil market remains fragile. Limited growth in travel and economic activity saw it cut its forecasts for world oil consumption by 200kb/d to 96.4mb/d. Nevertheless, it alsosaid the market’s prospects look brighter in the second half of the year, when it expects swollen oil inventories to decline sharply as fuel use picks up. Pockets of tightness are supporting the market. The polar blast freezing much of the US is drivingup demand for heating oil. And Indian demand for gasoline has surged as the public moves away from public transport to avoid coronavirus. Supply side news was marginally positive. Azerbaijan said it cut output last month in line with its commitments underthe OPEC+ supply agreement. Shell also said its oil production will fall 1-2% a year and expects no new frontier exploration after 2025.

The North Asia LNG market was subdued as markets closed for the Lunar New Year. Trading activity ground to a halt, with no offers or bids on the S&P Global PlattsJKM LNG market. Sentiment on the futures market weakened on falls on European benchmarks. The JKM March contract fell 0.2% to USD8.265/mmbtu. Falls in longer dated futures were even greater, with the April contract failing 4.9% to USD6.365/mmbtu.