Oil prices broadly stable as stimulus hopes balance virus fears

Cornelia Mascio
Luglio 18, 2020

Oil held its losses in Asia after weak US economic data cast doubt on the prospects for a demand recovery even as OPEC+ prepares to taper output cuts starting next month.

On Thursday, the United States reported at least 75,000 new COVID-19 cases, a daily record. While positive, the report notes that the outlook for 2021 "remains dependent on considerable uncertainties, both to the upside and the downside". The Empire site will export Mars Blend, a crude that can easily offset production OPEC+ and its allies have cut to stabilize the market.

Fears of a second wave of cases of COVID-19 - led by the United States - are keeping the rally in check.

Brent for September settlement fell 0.2% to $43.28 on the ICE Futures Europe exchange and is up 0.1% so far this week. US crude futures were up 48 cents, or 1.2%, to $40.80 a barrel as of 10:53 a.m. ET (1453 GMT) while Brent gained 61 cents, or 1.4%, to $43.51 a barrel.

US West Texas Intermediate (WTI) crude futures slid 84 cents, or 2.1%, to $39.26 a barrel at 0138 GMT, while Brent crude futures fell 77 cents, or 1.8% to $41.95 a barrel.

And now the recently Monthly Oil Market Report for July 2020 by OPEC shows that the oil market would tighten in 2H2020.

"With more production coming online from August, a dip in demand can really play a pivotal role in pushing recovering prices back to lower levels", said Rystad oil markets analyst Louise Dickson. Energy firms could start adding rigs later this year if prices remain stable at higher levels. "That gives the market confidence that OPEC+ is looking quite closely at those conditions to make sure they don't push the market in the wrong direction", he said.

"Oil prices are running well ahead of any economic recovery and I'm expecting a correction".

Dwi Soetjipto, chairman of regulator SKK Migas, said, "The upstream oil and gas sector nationally and internationally is going through extraordinary pressures due to lower prices; this is then followed by the Covid-19, which impacted consumption and demand".

- Crude oil purchases by China appear to be hitting the brakes in July after record purchases in May for loadings in June, with analysts now concerned that the buying spree has lost momentum, with inventories now full. MCX Crude oil July futures have support at Rs 2,970 with resistance at Rs 3,150.

Altre relazioniGrafFiotech

Discuti questo articolo

Segui i nostri GIORNALE