WTI holds at 18-year low as market weighs US output cuts, weak economic data

Crude futures were little changed following a range-bound session as the market balanced tightened supply picture against weakening demand outlooks.

ICE June Brent settled up 13 cents at $27.82/b while NYMEX May WTI settled unchanged on the day at $19.78/b.

Indications of a contraction in US crude supply placed a floor under prices Thursday.

ConocoPhillips, the largest independent US producer, said Thursday it will cut back its 2020 spending and production volumes more dramatically, slicing its capital spending by 35% and removing a total of 225,000 boe/d from its production guidance.

The US oil and gas rig count plunged by 74 to 567 the week ended Wednesday, rig data provider Enverus said Thursday, as capital budget and activity cuts announced recently by upstream operators continued to take effect.

Oil rigs accounted for the bulk of the decline, down 67 to 444, while rigs chasing natural gas slid by seven to 123.

Since March 11, the US domestic rig count total is down 47%, or 268 rigs, from 835. But weekly crude production has fallen just 6% from mid-March, dropping to 12.3 million b/d during the week ended April 10, according to the latest US Energy Information Administration data.

The tightened supply picture offset a bevy of weaker-than-expected US economic data released early Thursday.

The US Labor Department on Thursday morning reported 5.25 million initial unemployment claims for last week, putting the seasonally adjusted insured unemployment rate at 8.2%, the highest since 1975. US housing starts saw their biggest monthly contraction since 1984 in March, sliding 22% to 1.216 million, and the Philadelphia FED manufacturing index plunged to minus 56.6, the lowest reading since 1980.

NYMEX refined product futures finished mixed, with May ULSD climbing 3.25 cents to 94.63 cents/gal and May RBOB settling 1.53 cents lower at 70.51 cents/gal.

US President Donald Trump later Thursday is expected to release guidelines for his administration's plan to reopen at least some of the areas that are currently under lockdown.

Refined product demand has cratered in recent weeks as COVID-19 quarantine efforts have kept all but essential workers at home. Approximately 316 million people across 45 states and the District of Columbia are subject to state-wide or regional stay-at-home orders, according to media reports.

Any potential restart is likely to boost product demand however widespread shut downs and demand destruction are likely to persist well into May. New York governor Andrew Cuomo on Thursday extended his stay-at-home order to May 15, from the original April 30.