Crude Oil: stuck at US$40
Oil prices slid on Tuesday as traders grew cautious on demand fears and rising coronavirus numbers in the U.S. and Europe. “Sentiment is suffering from the uncertainties related to Covid-19,” said Harry Tchilinguirian, head of commodities strategy at BNP Paribas SA.
Oil prices have been rangebound at around $40 per barrel for months, and there is little sign that prices will break out anytime soon. “The market is stuck,” Giovanni Staunovo, a commodity analyst at UBS Group AG, told Bloomberg. “For prices to rally, OPEC+ spare capacity needs to drop, and to see that, demand needs to recover further. As long as there’s not a second global lockdown, oil can’t fall too far below $40.”
Libya’s oil production has climbed to 250,000 bpd, up from 90,000 bpd, as the blockade on the country’s oil export terminals is partially lifted. Exports at the eastern ports of Hariga, Brega and Zueitina have resumed, but Es Sider and Ras Lanuf remain offline. JPMorgan and Goldman Sachs estimate that exports could rise to 0.5 mb/d by the end of the year, and potentially rising to 1 mb/d by the end of the first quarter in 2021. |
