Crude oil futures rebound after touching 18-year low, but bearish outlook lingers

Singapore — 0233 GMT: Crude oil futures rebounded in mid-morning trade in Asia Thursday, after front-month WTI sank overnight to settle at an 18-year low on Wednesday.

Nevertheless, the outlook remains bearish amid a significant jump in supply following news that the US recorded its largest-ever build in crude stocks last week.

At 10:33 am Singapore time (0233 GMT), ICE Brent June crude futures rose 92 cents/b (3.32%) from Wednesday's settle at $28.61/b, while the NYMEX May light sweet crude contract was 59 cents/b (2.97%) higher at $20.46/b.

"While Brent appears to have found a floor at around $25/b earlier, prices may well fluctuate just above, awaiting more positive signs of the coronavirus blowing away," IG market strategist Pan Jingyi said in a note on Thursday. Front-month June ICE Brent futures settled $1.91/b lower on the day at $27.69/b on Wednesday.

"A massive 19.2 million barrel build up in US crude inventories had again accelerated the selling, while the weak economic figures did little to mend sentiment," Pan added.

Front-month WTI settled at an 18-year low of $19.87/b on Wednesday after US Energy Information Administration data showed the largest-ever weekly build for US crude stocks.

US commercial crude stocks surged 19.25 million barrels to 503.62 million barrels during the week ended April 10, EIA data showed late Wednesday.

The build was the largest ever on record, exceeding the previous record-build of 15.18 million barrels the week prior. Nationwide crude inventories now stand at 6.2% above the five-year average, EIA said.

The IEA also expects global demand in April to be 29 million b/d lower than in April 2019, and forecasts that demand in May would be 26 million b/d lower year on year.

The crude build arose from a steep decline in refinery demand, with the growing spread of the COVID-19 pandemic eroding oil products demand amid lockdowns across the globe.

Nationwide gasoline stocks climbed 4.91 million barrels to a record high 262.22 million barrels in the week ended April 10, while distillate inventories surged 6.28 million barrels to 129.00 million barrels, the EIA data showed.

Meanwhile, the global number of confirmed COVID-19 cases worldwide have risen to 2.06 million as of Thursday morning, based on latest available Johns Hopkins University data.