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In a week marked by a massive drop in prices for both North Sea and US light oil, the Oslo Stock Exchange opened on Wednesday. In the morning, however, the mood has changed. The main index rose about 0.5 percent.
At the same time, oil prices are rising a bit. After falling overnight on Wednesday and continuing to drop in the morning hours before and at the opening of the stock market, the North Sea oil spot price has now dropped around 7.3 percent. A barrel is trading at $ 18.2, costing less than $ 16 on the lowest Wednesday.
Earlier this week, oil stocks took a beating from the start, but they also rebounded a few hours in trade.
- Equinor, DNO and Aker BP fell from the start. Just before half past twelve, both Aker BP and Equinor are rising, while DNO continues to drop approximately one percent.
Oil companies have experienced onceville price increases in recent weeks as a result of the collapse in the oil market. Due to overproduction, tankers are used to store oil.
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Despite the sharp drop in oil prices overnight, John Fredriksen’s front line continues to drop 1.19 percent. On Tuesday, the company rose more than 13 percent.
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Oil company Hunter Group, where Arne Fredly is a major owner, rose more than five percent at the opening of the stock market and rose about 0.6 percent in the morning.
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Okeani’s Eco Tankers are up 1.82 percent.
- Hafnia Limited was up 4.73 percent from the start, continuing above nine percent.
Brutal Oil Week
It has been a brutal week so far for the world’s oil markets. On Monday, the price of US light oil (WTI Crude) fell to historically low levels, which at one point were well below the mark. In practice, this meant that buyers had to pay if they signed forward contracts that expired in May.
Christian Lie, chief strategist at Danske Bank, calls development in the oil market “a perfect storm.”
– Many thought that what happened with the May contract in US oil was a technical phenomenon, although there were also movements in the contracts in the future. However, in the last 24 hours, we have seen that they have also fallen, raising fear that this is not just technical. There are increasing doubts about whether production cuts will be able to offset the drop in demand, he says.
A similar sharp decline followed on Tuesday in the “burned place of” Norwegian oil “(North Sea oil). Prior to the opening of the stock market, oil prices had fallen steadily overnight. Prices so far Oil prices have fallen 40 percent this week, the steepest drop in modern times.
“It is not inconceivable that the drop in oil prices that we have seen in recent days will alter the optimism that we have seen in the stock market in recent weeks,” the chief strategist strategist told DN before the opening. from the stock exchange.
Historical sign
On Tuesday, the Oslo Stock Exchange closed at just over 1 percent, after a month with a rise of just over 8 percent. However, since the stock market crash in early March, the movements have been excellent. Only twice has it happened that the main index closed three days in a row.
Chief strategist Lie believes the market has been too fast to announce an early reopening of the economy.
– A second wave is not unlikely now, as a result of the reopening of the economy, and if it arrives, it will mean restrictions that will last longer and, therefore, an economy that will spend significantly more in the normalization process.
It signals a warning sign on Wall Street that has never been seen before.
– Never before has the stock market depended so much on the development of so few companies. In the broad S&P 500 index, the five largest companies make up the bulk of the index by more than 20 percent.
– This means that the guidance and results of these companies, as well as the market confidence in the companies, can mean a lot if we have a new recession in the general stock market.
“The panic continues to spread”
Tor Henrik Thorsen, portfolio manager at Fondsfinans Kapitalforvaltning, closely supervises the energy sector on the Oslo Stock Exchange.
He believes that falling demand and the subsequent collapse in prices will have an impact throughout the summer and into the fall.
– The panic continues to spread, he says.
– For a long time there was talk of the fact that there were negative oil prices, so it was not a surprise. With this week’s big moves, some are grinding to a halt, but the big question is whether this will be in the short term or whether the big imbalances will also have long-term effects.
Thorsen believes there will be a new correction, but not necessarily as dramatic as in early March.
– The fall in oil prices will create a domino effect that will drag the Oslo Stock Exchange, which is particularly vulnerable.
It refers to the crown measures of different countries, and especially to the United States, where the central bank (Fed) has taken massive liquidity measures to keep the economy going.
– There have been positive triggers in the stock market, but when you look at the price of oil, it is easy to see that all is not yet well. (Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We want you to share our cases using a link, which links directly to our pages. Copying or any other use of all or part of the content may only be made with written permission or as permitted by law. For more terms see here.
