Oil Prices Reach Interim Recovery Stage
Oil prices have now reached an interim stage of recovery.
That’s according to Rystad Energy’s Head of Oil Markets Bjornar Tonhaugen, who outlined that prices will fluctuate around the $40 mark “for a while” and that “huge deviations” would not be likely.
Further gains to levels of $45-50 would not be justified at this stage as there are still valid concerns on the demand side, Tonhaugen highlighted.
“The pandemic has not disappeared, it’s tiring for many to refer to Covid-19 again and again, but the reality demands it,” Tonhaugen said in a statement sent to Rigzone on Monday.
“Infections are rising in key markets around the world and there are valid concerns that the world is in for a prolonged period of dealing with its consequences,” he added.
“If infections and hospitalizations rise even more and a second wave becomes a reality, the market will get depressed again with demand declining. Not as much as in the first half of the year though, as the extent of lockdowns that we have experienced was too painful to bare for many countries,” Tonhaugen continued.
The Rystad representative also highlighted that today is the day that Iraq must present its plan to get production down in line with its OPEC+ targets. Tonhaugen warned that patience by Riyadh and Moscow is running thin and said the market will be watching the reactions to Iraq’s plans in the coming days.
“If OPEC+ sees that it cannot trust the members of the alliance, it’s not for granted that the deal will be maintained. What if it gets scrapped?” Tonhaugen said.
“With everything else stable (demand), if compliance plans that are put on the table are trustworthy and commitments are kept, we can expect prices to move between $40 and $45 maximum before the next OPEC+ meeting, which will be another benchmark event,” Tonhaugen added.
To contact the author, email andreas.exarheas@rigzone.com
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- UK Oil Regulator Publishes New Emissions Reduction Plan
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- PetroChina Posts Higher Annual Profit on Higher Production
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- McDermott Settles Reficar Dispute
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil Demand Outpaces Expectations, Testing Calculus on Peak Crude
- House Passes Protecting American Energy Production Act
- TotalEnergies Restarts Production in Denmark's Biggest Gas Field
- USA Oil and Gas Job Figures Jump
- Republican Lawmakers Say IEA Has Abandoned Energy Security Mission
- Blockchain Demands Attention in Oil and Gas
- Houthis Warn Saudi Arabia of Retaliation If It Backs USA Attacks
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Summer Pump Prices Set to Hit $4 a Gallon Just as Americans Hit the Road
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea