Following the record quarterly and monthly losses, crude oil prices stay around long-term lows on Wednesday. Brent briefly dipped to lows in the $24.70 area and then bounced marginally, to settle around the $25 handle. The market remains depressed as global energy demand continues to weaken amid the coronavirus pandemic across the globe.
Meanwhile, the American Petroleum Institute data showed that US crude inventories increased by 10.5 million barrels last week, far above expectations of a rise by 4 million barrels. The bearish report added to the negative sentiment in the market on Wednesday.
At that, oil failed to receive substantial support from the reports that US President Donald Trump and his Russian counterpart Vladimir Putin agreed to talks on stabilizing energy markets. The US leader noted he would join discussions between Saudi Arabia and Russia if needed, to resolve the problem of low prices amid a price war between the two producers.
Also, US Energy Secretary Dan Brouillette spoke with Russia’s Minister of Energy Alexander Novak about the sell-off in global oil markets. The two have reportedly agreed to hold discussions. Still, these news headlines failed to lift sentiment in the market as well.
It looks like traders need some actions from the largest producers now, not just words, especially as the coronavirus outbreak continues to hurt global energy demand immensely. In other words, oil prices will likely remain under the downside pressure amid the ongoing inaction by the OPEC+ group.
As the pressure persists, Brent crude may threaten fresh multi-year lows as the futures are struggling to cling to the $25 level today. Once below $24.50, the prices could target the $20 handle. In this scenario, large exporters may proceed to some supportive measures. By the way, according to the latest reports, Russia said it is not planning to boost oil output amid the global oversupply. Meanwhile, Saudi Aramco oil supply has exceeded 12 million barrels per day on the first day of April.