The EIA said last week that production in the US was expected to fall by 470,000 bpd.
The projected loss of demand is much more than the reduction in production agreed by the producer countries. The Organization of the Petroleum Exporting Countries (OPEC) and related producers, including Russia, a group known as OPEC +, have agreed to reduce production by 9.7 million barrels a day, while hoping to reduce another 10 million barrels from other countries, including the United States. , could reduce production by 20 million barrels per day.
“Given the extent of the destruction of demand this quarter, the reduction in OPEC + will not reach market equilibrium in the foreseeable future, and this will be reflected in the price weakening that has occurred since the OPEC + agreement,” ING said in a note on Thursday.
Concerns about falling demand kept some gains, with both contracts trading up to 2.5% higher at the beginning of the show than on Wednesday.
Oil rose sharply on Thursday after sharp losses in the previous session, investors hoped that a large increase in U.S. inventories could mean that producers could have little opportunity but deepen production cuts as demand for a coronavirus pandemic ravaged.
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