Российские нефтяные компании могут начать сжигать нефть

The petroleum complex on Thursday settled mixed. Crude oil found support on comments from Kuwait and Algeria that they were not waiting until May 1 to reduce their crude output and will instead cut their crude oil production immediately. Also, crude oil had carry-over support from Wednesday when President Trump said he ordered the U.S. Navy to «shoot down and destroy» any Iranian gunboats that harass American ships at sea. Gasoline fell back on demand concerns after global manufacturing PMIs fell to record lows.

Crude oil prices found support Thursday on a projection from IHS Markit Ltd on Wednesday that the recent plunge in crude oil prices has put 1.75 million bpd of U.S. shale oil production at immediate risk of being shut down. IHS Markit also said that the number of new wells brought online will plunge by 90% by the end of the year. In addition. Evercore ISI estimates that 5 million bpd, or around 40% of U.S. crude production, could be temporarily shut down by the end of June, which would help balance the market.

Schlumberger Ltd, the world's biggest oilfield contractor, said Thursday that its projects oil companies will slash project spending by 40% this year in North America. Data from Baker Hughes on Apr 17 showed U.S. oil exploration companies shut down 13% of the U.S. drilling fleet as of the week ended April 17, and that oil drillers have now closed more than one-third of total U.S. drilling rigs because of the plunge in prices.

Crude oil prices are seeing some continued short-covering after the collapse in oil prices early this week, when Jun WTI crude fell to a contract low of $6.50 on Tuesday, and the May contract fell to a record nearest-futures low of -$40.32 on Monday before expiring on Tuesday. Brent crude on Wednesday slumped to a 21-year low before recovering.

Crude storage tanks, pipelines, and tankers around the world are quickly being filled to capacity by the vast oil glut being caused by the partial shutdown of the global economy and the plunge in demand by about one-third. Royal Vopak NV, the world's biggest independent storage company, said on Tuesday that its three main crude storage hubs in Singapore, Rotterdam, and Fujairah are nearly filled to capacity. U.S. oil inventories have risen to 79% of capacity, according to EIA data.

U.S. economic data on Thursday was bearish for energy prices. The U.S. Apr Markit manufacturing PMI fell -11.6 to a record low of 36.9. Also, U.S. weekly continuing claims rose +4.064 million to a record 15.976 million (data from 1967). In addition, Mar new home sales fell -15.4% to a 10-month low of 627,000, weaker than expectations for a decline to 644,000.

Global manufacturing activity is contracting at a record pace and is very negative for energy demand. Thursday's Eurozone Apr Markit manufacturing PMI fell -10.9 to 33.6, weaker than expectations of -6.5 to 38.0 and a record low (data since 1997). Also, the UK Apr Markit manufacturing PMI fell -14.9 to 32.9, weaker than expectations and a record low (data since 2000). In addition, the Japan Apr Jibun Bank manufacturing PMI fell -1.1 to a record low of 43.7 (data since 2017).

Wednesday’s weekly EIA data showed that U.S. crude oil inventories as of Apr 17 were +8.8% above the seasonal 5-year average at a 2-3/4 year high of 518.64 million bbl (at 79.4% of total U.S. oil storage capacity of 653 mln bbl), gasoline inventories were +12.6% above the 5-year average, and distillate inventories were -0.8% below the 5-year average. Oil inventories at the Cushing hub as of Apr 17 rose +4.78 million bbl to a 2-1/4 year high of 59.74 million bbl (at 78.6% of Cushing's estimated capacity of 76 mln bbl). U.S. crude production in the week ended Apr 17 fell -0.8% w/w to 12.2 million bpd, down by -6.9% from Feb's record-high of 13.1 million bpd.