Oil: China to revive demand – TDS

More demand for oil is expected as China stimulates its domestic economy. On the supply side, Venezuela’s situation and OPEC’s further curtailments could remove oil from the market sending the crude higher, analysts at TD Securities report.

Key quotes

“CTAs are repositioning in response to strengthening product prices as Chinese refineries cut run rates in response to the dramatic decline in demand and as hopes grow that Chinese economic stimulus will revive demand.” 

“While Rosneft's sanctions may not translate into a severe disruption for energy markets, it will immediately hamper Venezuela's ability to export crude, which further removes oil from the market.”

“Meanwhile, in Libya, there are few signs that a cease-fire may be brokered, as Tripoli’s port was forced to halt shipping amid hostilities. In this context, the market is looking towards OPEC+ to grow their curtailment, as the group's compliance is reigned in but Saudi continues to keep exports elevated and Russia is seemingly reluctant to participate in further curtailments.”