Oil Market Hits and Misses for the Week
Though they command opposite ends of the spectrum, hindsight and foresight both garner much attention within the energy markets. Given these contrasting concepts' importance in oil and gas, Rigzone is launching a new weekly addition to its editorial lineup that will present insights from informed market-watchers comparing what they expected to happen versus what actually happened.
For this first installment of a veritable “hits and misses” in the oil market, two commentators have agreed to provide some of their hindsight and foresight from the past week. Keep reading for their insights in this new – and informal – Rigzone exclusive.
Rigzone: What were some market expectations that actually occurred during the past week – and which expectations did not?
Barani Krishnan, senior commodities analyst with Investing.com: The main expectation that panned out for the oil market this week was that oil prices will end the rebound the past two weeks. That rebound was highly illogical, given the demand destruction that was occurring across the energy space. The U.S. Energy Information Administration says jet fuel demand alone is down eight percent year-on-year.
Tom McNulty, Houston-based managing director with B. Riley Financial’s Great American Group: All the chatter here in Houston was about the coronavirus, and how it would hurt oil and gas prices, as well as stock prices for public oilfield services and exploration and production companies. It did. Even the midstream players got hurt. There is still a lot of potential supply in the face of falling demand.
Rigzone: What were some market surprises?
McNulty: I’m surprised we have not seen a faster acceleration in Chapter 11 (bankruptcy) filings. Folks are holding out hope for a commodity price rally that is not coming.
Krishnan: That we still haven’t broken below $50 per barrel on Brent, which is an absolute must given the demand destruction that’s going on.
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