Oil Price Update

The International Energy Agency (IEA) said on Thursday that oil demand is set to fall this quarter due to the coronavirus outbreak in China. "The consequences of COVID-19 for global oil demand will be significant," the Paris-based IEA said in its latest monthly report. "China was responsible for around three-quarters of last year's global oil demand growth. Before the outbreak of COVID-19, it was expected to drive over a third of oil consumption growth in 2020, but now we think it will be less than a fifth," the IEA said.

Russia has not yet decided on whether to extend an agreement with OPEC and other major oil producers regarding further output cuts, the Kremlin said on Thursday. Government spokesman Dmitry Peskov told reporters on Thursday that Russia will announce its position on a new OPEC+ deal in due course.

The sharp fall in energy demand from China is stranding cargoes of crude oil off the country's coast and prompting shippers to seek out other Asian destinations, Reuters reported on Thursday citing shipping data. Chinese refineries have cut their output by about 1.5 mil bpd over just 2 weeks, causing crude inventories to pile up. That has left numerous Very Large Crude Carriers (VLCCs), each of which can hold over 2 mil bbls of crude, unable to discharge at China's top crude import terminal of Qingdao, shipping data shows.