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Energy Summary for March 24, 2020

2020-03-24 20:07 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for May delivery added 65 cents to $24.01 on the New York Merc, while Brent for May added 12 cents to $27.15 (all figures in this para U.S.). Western Canadian Select traded at a discount of $15.00 to WTI, down from a discount of $13.75. Natural gas for April added five cents to $1.65. The TSX energy index added 4.91 points to close at 48.37.

Another day, another flurry of cuts. Major banks are slashing their 2020 oil price forecasts almost as frantically as oil companies are hacking away at their budgets. Now one bank has found itself in the unusual position of lowering its price forecast for the second time in just two weeks. London-based Barclays previously reduced its 2020 Brent and WTI forecasts on March 10, two days after Russia and Saudi Arabia sent markets into freefall by launching a price war even as COVID-19 continued to pummel worldwide demand. At the time Barclays cut its Brent forecast all the way to $43 (U.S.) from $59 (U.S.) and its WTI forecast to $40 (U.S.) from $54 (U.S.). These were steep cuts -- more than 25 per cent -- but it turned out they were not nearly steep enough. Now Barclays has slashed the respective Brent and WTI forecasts to just $31 (U.S.) and $28 (U.S.). Its analysts see no reason to even start hoping for better days "until the virus situation turns the corner." In the meantime, between the Saudi-Russian supply shock and the demand-sapping COVID-19 pandemic, the analysts are forecasting an average global oversupply of five million barrels a day this year, including a 10-million-barrel-a-day oversupply in the second quarter.

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