Oil prices held steady at a 18-year low on Thursday after OPEC lowered its global oil demand forecast due to the "historic shock" delivered by the coronavirus outbreak.
Before the Organization of the Petroleum Exporting Countries released its latest forecast, global benchmark Brent futures were up over $1 a barrel as investors hoped record builds in U.S. inventories would prompt producers there to cut output quickly.
OPEC said in a monthly report it now expects global demand to contract by 6.9 million barrels per day (bpd), or 6.9%, in 2020, and noted the reduction may not be the last.
Last month, OPEC projected a small increase in demand of 60,000 bpd.
OPEC and its allies, including Russia - a group known as OPEC+ - agreed over the weekend to reduce output by 9.7 million bpd for May and June.
Russian energy firms have already significantly revised down their plans for oil exports in May following the OPEC+ deal, three company sources and two traders told Reuters on Thursday.
"Low prices are here to stay until there is some clarity on when and by how much non-OPEC+ countries will chip in with additional production cuts," analysts at Rystad Energy said.
Hoped-for cuts of another 10 million bpd from other countries, including the United States, could lower production by around 20 million bpd, although some analysts have questioned that number.
"Oil prices must remain depressed to force shut-ins among non-cartelised producers," said Norbert Ruecker, head of economics at Swiss bank Julius Baer, referring to producers such as the United States, where a lot of production is unprofitable at current prices.
Some countries have also committed to increasing purchases of oil for their strategic stockpiles, but there are limits to how much oil can be bought and the extent of global coordination.
Speaking of U.S. strategic reserve buying, Commerzbank analysts said that "this would accommodate 23 million barrels, which would normally constitute a massive additional reserve but these days would only just be enough to cope with one weekly increase in stocks."