13-4-21 - Oil Prices Get Bump from OPEC Demand Optimism
(Bloomberg) -- Oil closed at the highest in over a week after OPEC boosted its expectation for this year’s demand recovery, while signs continue to emerge of rising fuel consumption in parts of the world.
Futures rose 0.8% in New York on Tuesday, settling above $60 a barrel for the first time since early April. OPEC raised its forecast for oil consumption by 190,000 barrels a day for 2021, though lowered its outlook for the second quarter.
Traders are also watching for signs of a robust demand rebound in the U.S., the world’s top oil-consuming country. In New York City, toll bridges and tunnels are on pace for the busiest April in at least seven years. At the same time, inflation data showed the biggest increase since 2012 as signs of an economic rebound grow.
“There’s going to be tremendous pent-up demand for crude,” said Edward Moya, senior market analyst at Oanda Corp. “There are some areas that are seeing cases trend higher, but the restrictions are going to be short-lived as vaccines get distributed.”
Despite early signs that travel demand is starting to materialize, prices have yet to break out of the narrow trading range they’ve been stuck in since mid-March. A measure of market volatility slumped to the lowest since February for West Texas Intermediate futures, while aggregate trading volume in the benchmark remained below its 15-day moving average for a seventh straight session.
The market is still contending with spreading near-term demand concerns because of the resurgence of the virus. A flare-up of Covid-19 cases is leading to renewed restrictions in countries like India, where streets are emptying again as the nation tackles a new wave of infections. Meanwhile, U.S. health officials called for an immediate pause in use of Johnson & Johnson’s single-dose Covid-19 vaccine on worries over a rare and severe form of blood clotting.
“For things to open back up just like they normally were, it’s going to take some time,” said Tariq Zahir, managing member of the global macro program at Tyche Capital Advisors LLC. “The biggest issue going forward is getting as many people vaccinated as possible.”
• West Texas Intermediate for May delivery added 48 cents to $60.18 a barrel, the largest daily gain in a week
• Brent for June settlement rose 39 cents to $63.67 a barrel
The Organization of Petroleum Exporting Countries and it allies will be returning about 2 million barrels a day of output from May to July. More than half of the increase will be provided by OPEC’s de facto leader, Saudi Arabia, which has been making extra cutbacks to help clear the lingering glut. Rising demand means stockpiles should continue to diminish, the group indicated in a monthly report on Tuesday.
But rising output elsewhere could complicate the balance. Crude production next month in the Permian Basin, the most prolific U.S. shale patch, is expected to reach levels not seen since the start of the pandemic.
Meanwhile, U.S. crude stockpiles are expected to have fallen last week, according to a Bloomberg survey. The industry-funded American Petroleum Institute will report its figures later Tuesday ahead of the U.S. government’s weekly storage figures on Wednesday.
source: --With assistance from Alex Longley and Jack Wittels. Link
© 2021 Bloomberg L.P.
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"Comment to this article"The oil industry will not disappear, even though everyone is talking about green transition .... oil will be here for many decades to come, something must pay for the green transition, we do not assume the people want higher taxes ... :) and the money must after all, come from somewhere. we know no one who has a money tree you just shake every month to the 1st of the month and wupti then all the bills are paid. not going to happen
So there are still plenty of good investment opportunities in the oil industry, but must have the right contacts .... :)
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"Comment to this article"There will be a bill when the economies get going again and the big backlog comes with all the reserves that will remain in the ground due to the low oil prices we have had for some years now, along with the global pandemic. Many people think the green transition is just around the corner, but they do not think about all the things that oil influences in our daily lives in addition to fuel etc. oil is going to be an important part of all life, many decades ahead..and prices are going to be significantly higher if only we look 5 years ahead, we are convinced of that..So investing in oil wells at the moment is probably not such a bad idea, even if you want to think green in its entirety, which we also think is perfectly fine, we must take care of what we have, but therefore you should not say no to a good business opportunity unless you are also ready to say no thanks to all those things and we mean all the things that oil contributes to in our daily lives, otherwise it is a bit double moral.
https://oilprice.com/Energy/Energy-General/Big-Oil-Is-Shedding-Assets-To-Focus-On-Key-Projects.html # #financeandeconomy #oilgas #energy #oil #investing #business #opportunity #success #growth
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Our notes to this: With the intention of selling these assets at spot prices as long as they cover their outstanding, banks have no interest in owning these oil reserves. This is not their business, these assets from the shale industry will be sold to a few multi national companies and they will be sitting on huge oil and gas reserves, giving them huge amount of power to carry out their business order with politicians who makes the laws and regulations when the time suits the companies.
It will never be a good thing to gather so much power in a few hands, it will make things even more difficult for the smaller oil and operator companies who are fighting a battle every single day to make ends meet so everyone can make money and keep their jobs.
The vultures have caught sight of that prey and are now only waiting to strike, it will be a tough time ahead
We have no plans to throw the towel in the ring so everyone, hold on even though it is mega tough and will be for a while in the future ... we do this for our investors and our joint business namely oil and gas production in the US
Happy Easter Holidays
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"As we say....leave in the the ground or tanks, if does not give you money in the BANK, market will rebound to 40-50 with in a short time, when OPEC+, Russia and the US shale sit down to discuss a fair market place for oil to trade, so we dont have these huge price jumps up and down not good for anyone in the long run..
To ALL Hang in there...:), this is just another BUMP on the road"
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