Last Monday we warned that oil prices could turn negative. That evening they did just that, with the main US domestic grade WTI trading as low as -$40/bbl for the May contract (sellers were paying buyers to take the oil). There were very specific circumstances surrounding that price move: the May contract was expiring thatContinue reading “After oil at -$40, what next?”
Monthly Archives: April 2020
Oil price crisis intensifies
We said last week that lower oil prices were inevitable. We based that assessment on the ongoing mismatch between collapsing demand (forecast to have fallen by between 25-30 mbd) and supply cuts (of just 9.7 mbd) which have not even been implemented yet. The OPEC+ agreement falls short of what needed to be done andContinue reading “Oil price crisis intensifies”
OPEC+ agree output cuts
Over the past weekend OPEC+ (OPEC plus Russia – and now plus a few other countries as well) announced that it had reached an agreement to cut oil production in response to the dramatic falls in oil demand following the economic dislocation caused by the Covid-19 virus. Supply/DemandGlobal oil demand is around 100 million barrelsContinue reading “OPEC+ agree output cuts”
Prospects for the recovery of the global oil market
On January 1, Brent crude oil was trading above $66/bbl. Three months later, it had fallen by more than 60% from that level. A coronavirus-driven decline was followed by a collapse when the three-year old agreement between OPEC and Russia to cut production and raise prices broke down. The root cause was a three-way tussleContinue reading “Prospects for the recovery of the global oil market”
Global Energy Comment 