[ad_1]
Photo: oil production (OilNow)
A steady recovery in oil demand is unlikely in the near future.
Oil prices are rising on Thursday, May 14, after an unexpected drop in US crude oil inventories. But growth is limited by a bleak outlook for the world’s No. 1 economy, as the coronavirus pandemic suppresses demand for fuel, and concerns about a possible second wave of the pandemic are growing. This was reported by Reuters.
Brent crude oil futures rose 1.78% to $ 29.71 a barrel at 10:00 Kiev time, WTI crude oil futures rose 1.78% to $ 25.74 a barrel.
Prices have risen in the past two weeks, as some countries have eased quarantines, allowing the opening of industrial companies and stores. However, new cases have been reported in South Korea and China, raising concerns about a possible second wave of infection that will affect economic recovery and fuel demand.
Jerome Powell, head of the US Federal Reserve, warned on Wednesday of a “long period” of weak economic growth and called for additional budget spending to prevent the effects of the pandemic.
“It is difficult to expect a sustained recovery in oil demand when the world’s largest economy shows significant uncertainty about prospects and high risks of decline,” said Edward Moya, market analyst at OANDA.
The drop in US crude oil stocks provided some price support at the start of the trading session, but Moya said the price increases would require a much larger reduction in the coming weeks.
In the week before May 8, U.S. crude inventories fell 745,000 barrels to 531.5 million barrels, which was the first decline since January, the Energy Information Administration said on Wednesday.
Amid a slowdown in fuel consumption, the Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday it expects global oil demand to decrease by 9.07 million barrels per day in 2020, which is worse than the forecast. previous of a decrease of 6.85. million barrels per day. OPEC expects a sharp decline in demand in the second quarter.
Remember, according to the IMF, the expected price of oil based on the futures markets is $ 35.61 in 2020 and $ 37.87 per barrel in 2021.
The National Bank of Ukraine (NBU) in its macroeconomic forecast set the average oil price in 2020 at $ 35 per barrel. According to the NBU, such a drop in oil prices will lead to the fact that gas prices will drop in Ukraine by the end of the year by 10-15%.
Posted by: Alexander Belous
