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Oil prices mixed as demand shrinks, but stimulus hopes support

Published 03/26/2020, 08:36 AM
Updated 03/26/2020, 08:40 AM
© Reuters.
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By Sonali Paul
MELBOURNE, March 26 (Reuters) - Oil prices were mixed on
Thursday following three days of gains, with the prospect of
rapidly dwindling demand due to coronavirus travel bans and
lockdowns offsetting hopes a U.S. $2 trillion emergency stimulus
will shore up economic activity.
West Texas Intermediate (WTI) crude CLc1 futures slipped 4
cents, or 0.2%, to $24.45 as of 0018 GMT, while Brent crude
LCOc1 futures rose 12 cents, or 0.4%, to $27.51.
"With lockdowns in many countries, expectations of oil
demand contracting by more than 10 million barrels per day (bpd)
are rising. Such demand loss will increase the supply glut,"
Australia and New Zealand Banking Group analysts said in a note.
The collapse of a supply-cut pact between the Organization
of the Petroleum Exporting Countries (OPEC) and other producers
led by Russia is set to boost oil supply, with Saudi Arabia
planning to ship more than 10 million bpd from May.
"Production increases by Saudi Arabia and Russia loom, and
things still look uncertain due to the ongoing price war between
these two countries," ANZ said.
U.S. crude inventories rose by 1.6 million barrels in the
most recent week, the U.S. Energy Information Administration
said on Wednesday, marking the ninth straight week of increases.
Products supplied, a proxy for U.S. demand, dropped nearly
10% to 19.4 million bpd, EIA data showed.


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