Oil market has again “crumbled”. Analysts do not expect demand to recover even in a year

The week begins with a new reduction in oil prices. Sales slowed amid the threat of a second wave of the coronavirus pandemic hanging over the world.

Oil market has again “crumbled”. Analysts do not expect demand to recover even in a year

Brent crude fell 11 cents to $42.03 per barrel. At the same time, American WTI crude oil fell 14 cents to $ 39.69 per barrel.

Singaporean OCBC Bank economist Howie Lee said in a comment to Reuters that tensions in the oil market would increase until November.

“I believe that at this point, oil is more difficult to rise above, especially in connection with the growing concern about the spread of the second wave”, – he said.

The agency also notes that to date, the number of operating oil and gas drilling rigs in the United States and Canada has dropped to a record low. Many companies planned to resume active energy production, looking at the resurgent interest of buyers, but on Sunday the message was changed by the message of the World Health Organization. The WHO recorded a record increase in the number of people infected with coronavirus, with the highest rates recorded in the Americas.

“The potential economic damage from the new round of COVID-19 countermeasures is likely to curb investor enthusiasm”, – Michael McCarthy, chief market analyst at CMC Markets, said.

According to the International Energy Agency, even by the end of 2021, global oil demand will continue to be 2 million barrels per day below the level before the pandemic. The OPEC + deal made it possible to balance supply and demand on the world market through a reduction in resource extraction, however, oil reserves are too huge, and all this remains to be used before fully resuming production. As you know, in the midst of a pandemic, oil producers even used tankers and caves to store raw materials.

According to Bloomberg, by the end of the month, global oil reserves will be about 2.7 billion barrels higher than at the end of 2013 and almost 4 times more than during the 2017 shale boom, when oil collapsed to $25 per barrel.

Comments:

Loading ...