Asian COVID-19 Worries


Oil markets are trading higher this morning, with ICE Brent trading around US$69/bbl at the time of writing. This move higher comes despite worries over the COVID-19 situation in Asia, with Taiwan and Singapore tightening COVID-19 related restrictions in recent days, whilst Japan has also recently extended its regional states of emergency. In India (where we saw a surge in COVID-19 cases in April and May), we are getting a better idea of the impact that the latest wave of COVID-19 had on oil demand.  According to Bloomberg, preliminary data from the three largest fuel retailers in India show that road fuel demand over the first half of May was down by around 20% from the previous month.

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The latest production data from China this morning shows that domestic crude oil production in April totaled 16.45mt or 4.02MMbbls/d, which is slightly down from the 4.04MMbbls/d produced in the previous month. In addition, refiners processed 14.19MMbbls/d of crude oil, up more than 7% YoY, and marginally higher MoM. Taking into consideration these numbers, along with previously released crude oil import numbers, Chinese crude oil inventories declined by around 308Mbbls/d over April.

Finally, the latest positioning data shows that speculators reduced their net long for both ICE Brent and NYMEX WTI over the last reporting week, likely with concerns over how the COVID-19 situation in India will evolve. Speculators reduced their net long in ICE Brent by 20,737 lots over the reporting week, to leave them with a net long of 295,833 lots as of last Tuesday. This was driven predominantly by longs liquidating, rather than fresh shorts. Similarly, NYMEX WTI saw speculators cut their net long by 24,208 lots, leaving them with a net long of 360,228 lots.


Workers at BHP’s remote operations center in Santiago for the Escondida and Spence copper mines rejected a final wage offer on Saturday, with almost 97% of the union members opting to strike in voting that concluded over the weekend. The company will now have the right to call for government mediation in an effort to avoid strike action.

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Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...

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