Oil Prices In Upswing
TAYO ELEGBEDE
Oil prices traded up on Monday over half of Friday’s losses, as fresh hopes for demand recovery emanates in the global oil market.
West Texas Intermediate (WTI) crude traded at $42.05 with a rise of 2.04 per cent or 0.84 cents, while Brent crude rose by 1.13 per cent or 0.58 cents, selling at $44.98 as at 13:38 GMT Monday afternoon.
According to some market analysts, prices will rebound this week as demand is said to have recovered more in Asia as countries ease their lockdowns.
While both benchmark fell on Friday due to demand threats, hopes grew today, as Saudi Aramco’s Chief Executive, Amin Nasser said there had been a “partial recovery” in demand, and lauded a strong rebound in crude appetite in major markets.
This positive comment has come after Iraq agreed on Friday to comply with the OPEC+ supply cut deal, thereby reducing its supply by a further 400,000 barrels per day in August and September to compensate for its overproduction in the past three months, leaving its total reduction to 1.25 million bpd this month and next.
Meanwhile, oilprice.com in its report said Libya’s oil blockade will also help clear the global supply glut that the market is feared to face again after the OPEC+ eased supply cuts by 2 million barrels per day starting this month.
The report said “Libya’s port blockade is set to keep the North African country’s oil off the market until at least the fourth quarter of 2020, which, as devastating as it will be for Libyan oil revenues, could help reduce the expected global production glut by 65 percent.”
Leaving Libya’s current oil production at 100,000 barrels per day (bpd) from the 1.2 million bpd it started of with in the year before further escalation of the conflict.
“With no immediate return of Libyan oil to the market, the expected global production surplus later this year could be just 58.6 million barrels or about one-third of Rystad Energy’s previous forecast,” the report added.
Comments are closed.