WASHINGTON (DTN) -- Oil and product futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange accelerated losses in market-on-close trade Tuesday. Declines were led by RBOB futures as traders expect another week of sizable inventory gains in U.S. crude and product stockpiles with coronavirus pandemic hammering demand for refined products.
At settlement, May West Texas Intermediate futures dropped back $2.45 to $23.63 per barrel (bbl) and ICE Brent June contract plunged $1.18 at $31.87 bbl. Both benchmarks closed within their recent trading ranges.
NYMEX May RBOB contract fell 5.34 cents to $0.6482 gallon and NYMEX ULSD May contract moved lower 1.82 cents to $1.0275 gallon.
Tuesday afternoon, traders positioned ahead of weekly release of the U.S. inventory report for the week-ended April 3, with consensus calling for large across builds to have occurred amid a collapse in fuel demand. Analysts estimate crude oil stocks likely to have increased by about 9 million bbl last week and gasoline supplies to have gained 3 million bbl on week. Distillate inventories are projected to have increase by 2 million bbl.
American Petroleum Institute will release its inventory report at 4:30 p.m. EDT followed with official figures by U.S. Energy Information Administration at 10:30 a.m. EDT.
Earlier Tuesday, EIA projected global oil demand would fall sharply this year as a result of coronavirus pandemic, down to 95.52 million barrels per day (bpd) from 101.85 million bpd in its previous forecast.
"If realized, 2020 would see the largest year-over-year percentage decline in global oil consumption since at least 1990, the year EIA began tracking global consumption levels," said EIA.
The agency's projections would push the world oil disposition to a staggering 3.87 million bpd surplus in the current year, weighing heavily on the oil prices.
The EIA forecast comes ahead of crucial meetings and decisions scheduled for coming days. The Organization of the Petroleum Exporting Countries and Russia-led allies are holding a virtual gathering Thursday to debate curbs of 10 million bpd or more to counter lost demand. Saudi Arabia has also announced it will host an extraordinary G20 meeting by video conference on Friday to ensure energy market stability.
Earlier reports indicated Saudi Arabia and Russia would agree on production cuts as long as U.S. shale producers are willing to participate in the pact. U.S. President Donald Trump rebuffed the idea this week, saying shale production has already fallen as a result of pandemic and U.S. companies cannot coordinate supply cuts because of the antitrust law.
The EIA forecast released Tuesday "demonstrated that there are already projected cuts of 2 (million bpd), without any intervention from the federal government," U.S. Energy Department said in a note on Tuesday.
According to the latest forecast, U.S. production is projected at 11.8 million bpd in 2020 and 11.1 million bpd in 2021, down 1.4 million bpd this year and 700,000 bpd in 2021 from EIA's previous outlook.
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