Oil extends losses, extremely low Cushing inventories

Several supply and demand information has surfaced in the market which put additional pressure on the crude prices:

• Rising concerns regarding economic slowdown may lead to a reduction in oil consumption
• JODI data shows a drop in oil demand in April to 97% compared to 2019 levels (mainly by Asian countries)
• Libya's oil production could rebound up to 800,000 bpd compared to the recently reported 100 bpd (however it may not be a stable bounce)
• Crude oil production in Saudi Arabia is growing to 10.44 billion bpd, exports are rising, and domestic inventories increased to the level of nearly 140 million barrels

Crude oil continues to move south on Monday, although demand reaction can be observed below $108 per barrel. The level of $105 is acting as major support from the perspective of the latest upward wave. At the same time, the market remains very tight, which is visible when looking at Cushing's stockpiles, which reached extremely low levels. This shows that nearly all available crude oil is physically delivered to contractors. Source: xStation5

Cushing inventories are extremely low, which shows the enormous demand for oil. In the past, inventories close to 20 million barrels at the settlement point (approx. 1-1.5 days of consumption) were treated as contrarian signals. However, currently we can observe  huge demand for crude oil. At the moment, it is difficult to talk about a real slowdown in US consumption, although of course the price of $5 per gallon is unacceptable for the majority of US consumers. Source: Bloomberg