(16 April 2020)DAILY MARKET BRIEF 2:WTI crude slipped below the $20 a barrel for the first time

<p>WTI crude slipped below the $20 a barrel for the first time in a move that has been more sustainable than we have seen previously, after the IEA said that the global oil demand will slump 9% this year, meanwhile the oil storage will be full by mid-2020. It again comes back to the simple equation of too much offer versus a tumbling demand. But oil producers don’t want to hear a word of it, at least this is what we conclude after the leading oil suppliers failed to come up with a strong commitment to reduce their joint production. But the market always adjusts itself. With oil prices this low, many oil producer nations will need to back off for a while, given that pumping oil below $20 a barrel is economically unviable for most of them. Therefore, looking for dip-buying opportunities is the main play in oil. For energy stocks however, the downside risks persist.</p>