Global crude oil prices may have bottomed out as cities across the globe have begun to ease lockdown restrictions and more drivers hit the road.
Australia, New Zealand, Vietnam and some European countries have loosened measures restricting travel and business operations, even allowing some indoor events under social distancing guidelines.
Thailand plans to reopen restaurants tomorrow (except those in malls), as well as street food stalls, fresh and flea markets, hair salons, supermarkets, public parks and pet clinics, all using social distancing. Alcohol sales remain restricted, however.
Thai Oil Plc (TOP), the country's top oil refiner by capacity, said demand for oil in the US and EU will likely bottom out soon after prices collapsed to less than US$20 per barrel, even dropping below zero for a time on the West Texas Intermediate (WTI) benchmark market.
Some outdoor activities in France and Spain will be eased, causing prices to rise more than 10% on the WTI and Europe's Brent benchmark, according to TOP's report.
The US Energy Information Administration reported that its oil stocks on April 24 rose by 9 million barrels and that expected storage volume could rise to 10.6 million barrels soon, though gasoline storage dropped by 3.7 million barrels.
US oil production will be decreased by 300,000 barrels per day (bpd) in May and June, according to a report by Rystad Energy that provides communications to US oil producers.
Continental Resources, Cimarex Energy, ConocoPhillips, PDC Energy, Parsley Energy and Enerplus Corporation are estimated to cut production costs by 300,000 bpd from May to June, for a total of 700,000 bpd.
IRPC Plc, the oil refining and petrochemical arm of PTT Plc, said refined oil and petrochemical products are gradually growing in demand after China slowed its epidemic and reopened its economy.
President Noppadol Pinsupa said demand for products fell from the end of last year because of the trade war between China and the US and the pandemic.
IRPC is revising its estimated average gross integrated margin of $8.97. The margin denotes the net profit of oil refineries combined with petrochemical production.
Local oil retailer Susco Plc said global oil prices have already bottomed out but will take longer to return to last year's levels because a few months are needed to use current oil stocks, which are being held at full capacity.
Susco managing director Chairit Simaroj said $12 per barrel would convert to only 2 baht per litre. And with oil so cheap, producers will have to balance supply and demand.
The Energy Regulatory Commission (ERC) recently made an announcement with state-run Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority and the Provincial Electricity Authority on providing additional relief measures to electricity users.
ERC secretary-general Khomgrich Tantravanich said that after the second relief measures for power users launched two weeks ago, state power utilities are talking with the regulator about a possible third round of relief measures.
Mr Khomgrich said the ERC must use money intended for its investment budget for further relief measures.
Another cash resource could be penalty payments from private power producers to the ERC and the Power Development Fund, or levy collections from power plants nationwide of 1-2 satang per kilowatt-hour.
There are no details yet of how much money will be assigned to the new relief measures.
The first round of relief launched in March cost state utilities 39.5 billion baht from maintaining the fuel tariff, offering a 3% discount on power bills and refunding cash deposits.
The second round set conditions in March and May costing 23.7 billion baht that offered free electricity to households using under 150 units a month and calculated power bill equivalent to February's bill and offered discounts of 50% and 30% if the building consumed over 800 units and 3,000 units per month, respectively.
