Crude Oil: Is Still Stuck @ US$40
Oil prices fell on Monday on renewed concerns of coronavirus-related lockdowns. Oil edged up slightly on Tuesday. “As any new restrictions will likely be more localized, the oil demand recovery should still continue, although at a slower pace with the easiest demand gains behind us,” UBS oil analyst Giovanni Staunovo told Reuters.
Oil trading firm Vitol sees tepid demand growth and low trading activity in the short run, making the second half of 2020 rather bleak for traders. “Obviously, with crude trading, it’s difficult to maintain business volumes because there is less crude to market and trade; there’s less being produced,” Vitol CEO Russell Hardy told Reuters.
Middle Eastern oil producers are increasingly relying on debt markets to bridge the gap in government finances. Abu Dhabi just completed a $5 billion, 50-year bond. For now, Gulf States are still in good standing with debt markets, but with oil prices showing no signs of returning to pre-pandemic levels, how long can it last?
Libya’s National Oil Corporation will restart production from certain fields and some exports of crude oil, the company said. The force majeure will be lifted from fields and ports that are free of the presence of paramilitary groups and mercenaries, but remain in effect for those where there are still such groups, which hamper the work of NOC. Libya’s National Oil Corporation (NOC) sees oil production rising to around 260,000 barrels per day (bpd) next week, up from some 100,000 bpd before the blockade. |
