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Thursday's Market Minute: Oil Demand Devastated

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Thursday's Market Minute: Oil Demand Devastated

As the world continues to grapple with COVID-19, Crude Oil faces an especially challenging situation with the WTI contract yesterday making 18-year lows at 19.20. Global demand for oil has been devastated as people around the globe are staying put to avoid the virus, while the product simultaneously faces a supply glut. Even though Saudi Arabia and Russia have smoothed their recent spat over production and agreed to lower global by 10%, energy products seem likely to continue to face a challenging oversupply situation. Yesterday’s EIA Petroleum Status Report looked especially bleak, as Crude Oil posted its largest weekly build ever at +19.2 million barrels, not to mention its 12th straight week of climbing inventory. The /CL contract yesterday dipped below its previous low point from Mar. 30, setting the stage for what could be another move below the $20 level. Oil was unable to post any lasting gains above its 21-day EMA during its most recent leg up, so watch this level (currently near 25.19) for upside resistance, as well as the previous highs from April 3 at 29.13. The bigger question is, how much lower can oil realistically get?