Column: Oil prices no longer especially cheap after strong rally - Kemp - Reuters:
Oil prices are no longer particularly cheap by historical standards.
Perceptions about prices tend to be over-influenced by recent experience so current prices feel very low to producers used to receiving $60-80 per barrel over the 2018/19 period.
But over a longer time horizon, current prices are not especially cheap, and are only a little below long-run averages over the last few price cycles.
Current Brent prices at just over $40 per barrel are in the 49th percentile for all months since 1988, after adjusting for U.S. inflation (tmsnrt.rs/2V1lJea).
If prices were to settle at this level through the end of the year, the annual average would be just over $40, compared with an inflation-adjusted median of $50-55 since 1973.
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Friday 19 June 2020
Oil pares some gains on fears of economic weakness due to virus - Reuters
Oil pares some gains on fears of economic weakness due to virus - Reuters:
Oil prices rose on Friday but pulled back sharply from early highs on concerns that continued spread of the novel coronavirus could stall the United States’ economic rebound.
Crude benchmarks followed other assets lower after Boston Federal Reserve President Eric Rosengren said more fiscal and monetary support for the U.S. economy will likely be needed.
Rosengren repeated his view that the U.S. unemployment rate will likely be “at double-digit levels” at the end of 2020 and cautioned against reopening the economy too quickly after the end of lockdowns aimed at containing the virus.
Heightening fears, Apple announced that it would re-close certain stores as the virus spread further.
Brent crude LCOc1 rose 10 cents to $41.61 a barrel by 12:41 p.m. EDT (1641 GMT), after trading up to $42.92 a barrel and then briefly turning negative. U.S. crude CLc1 was 29 cents higher at $39.15, after earlier touching $40.49.
Oil prices rose on Friday but pulled back sharply from early highs on concerns that continued spread of the novel coronavirus could stall the United States’ economic rebound.
Crude benchmarks followed other assets lower after Boston Federal Reserve President Eric Rosengren said more fiscal and monetary support for the U.S. economy will likely be needed.
Rosengren repeated his view that the U.S. unemployment rate will likely be “at double-digit levels” at the end of 2020 and cautioned against reopening the economy too quickly after the end of lockdowns aimed at containing the virus.
Heightening fears, Apple announced that it would re-close certain stores as the virus spread further.
Brent crude LCOc1 rose 10 cents to $41.61 a barrel by 12:41 p.m. EDT (1641 GMT), after trading up to $42.92 a barrel and then briefly turning negative. U.S. crude CLc1 was 29 cents higher at $39.15, after earlier touching $40.49.
How #SaudiArabia Caused The Worst Oil Price Crash In History | OilPrice.com
How Saudi Arabia Caused The Worst Oil Price Crash In History | OilPrice.com:
Saudi Arabia made good on its promise to flood the market with oil after the collapse of the previous OPEC+ deal in early March, exporting a record 10.237 million barrels per day (bpd) in April 2020, up from 7.391 million bpd in March, data from the Joint Organisations Data Initiative (JODI) showed.
Total oil exports from Saudi Arabia, including crude oil and total oil products, also soared in April – by 3.15 million bpd to 11.34 million bpd, mostly due to the surge in crude oil exports, according to the data released by the JODI database, which collects self-reported figures from 114 countries.
Production at the world’s top crude oil exporter also jumped in April—to over 12 million bpd, at 12.007 million bpd, the database showed.
After flooding the market with oil in April and contributing to the oil price crash, OPEC’s de facto leader and largest producer, Saudi Arabia, agreed that same month to a new round of OPEC+ cuts in response to the demand crash and plunging oil prices. Saudi Arabia had to reduce its oil production to 8.5 million bpd in May and June under the OPEC+ deal for removing 9.7 million bpd of collective oil production from the market.
Saudi Arabia made good on its promise to flood the market with oil after the collapse of the previous OPEC+ deal in early March, exporting a record 10.237 million barrels per day (bpd) in April 2020, up from 7.391 million bpd in March, data from the Joint Organisations Data Initiative (JODI) showed.
Total oil exports from Saudi Arabia, including crude oil and total oil products, also soared in April – by 3.15 million bpd to 11.34 million bpd, mostly due to the surge in crude oil exports, according to the data released by the JODI database, which collects self-reported figures from 114 countries.
Production at the world’s top crude oil exporter also jumped in April—to over 12 million bpd, at 12.007 million bpd, the database showed.
After flooding the market with oil in April and contributing to the oil price crash, OPEC’s de facto leader and largest producer, Saudi Arabia, agreed that same month to a new round of OPEC+ cuts in response to the demand crash and plunging oil prices. Saudi Arabia had to reduce its oil production to 8.5 million bpd in May and June under the OPEC+ deal for removing 9.7 million bpd of collective oil production from the market.
Oil prices gain with OPEC+ holding the line on supply cuts - Reuters
Oil prices gain with OPEC+ holding the line on supply cuts - Reuters:
Oil prices rose more than 1% on Friday, adding to gains in the previous session, after OPEC producers and allies promised to meet commitments on cutting supply and two major oil traders said demand was recovering well.
Brent crude LCOc1 futures rose 61 cents, or 1.5%, to $42.12 a barrel by 0639 GMT, the highest in more than a week. U.S. West Texas Intermediate (WTI) crude CLc1 futures climbed 60 cents, or 1.5%, to $39.44 a barrel. Both contracts rose about 2% on Thursday and are heading for weekly gains of nearly 9%.
Plans by Iraq and Kazakhstan to make up for overproduction in May on their supply cut commitments supported the market. The promises came out of a meeting by a panel monitoring compliance by the Organization of Petroleum Exporting Countries and its allies, a grouping called OPEC+.
Prices are showing “solidity at these levels, as oil markets ignore the concerns rolling across other asset classes at the moment,” said Jeffrey Halley, senior market analyst at OANDA.
Oil prices rose more than 1% on Friday, adding to gains in the previous session, after OPEC producers and allies promised to meet commitments on cutting supply and two major oil traders said demand was recovering well.
Brent crude LCOc1 futures rose 61 cents, or 1.5%, to $42.12 a barrel by 0639 GMT, the highest in more than a week. U.S. West Texas Intermediate (WTI) crude CLc1 futures climbed 60 cents, or 1.5%, to $39.44 a barrel. Both contracts rose about 2% on Thursday and are heading for weekly gains of nearly 9%.
Plans by Iraq and Kazakhstan to make up for overproduction in May on their supply cut commitments supported the market. The promises came out of a meeting by a panel monitoring compliance by the Organization of Petroleum Exporting Countries and its allies, a grouping called OPEC+.
Prices are showing “solidity at these levels, as oil markets ignore the concerns rolling across other asset classes at the moment,” said Jeffrey Halley, senior market analyst at OANDA.