X

Sign Up To Our Free Newsletter

Join Now

Thanks for subscribing to our free newsletter!

ERROR

  • 3 minutes Texas forced to have rolling brown outs. Not from downed power line , but because the wind energy turbines are frozen.
  • 7 minutes Scientists Warn That Filling The Sahara With Solar Panels Is A Bad Idea
  • 11 minutes United States LNG Exports Reach Third Place
  • 15 minutes Joe Biden's Presidency
  • 2 hours U.S. Presidential Elections Status - Electoral Votes
  • 2 hours Texas Supply Chain Massacre
  • 1 day Texas forced to have rolling black outs, primarily because of large declines in output from fossil fuel power plants
  • 21 mins America Makes Plans to Produce Needed Rare Earth Minerals Domestically
  • 20 hours Good Marriage And Bad Divorce: Germany's Merkel Wants Britain and EU To Divorce On Good Terms
  • 14 hours Speaker Pelosi, "Tear Down This Wall" . . around Capital Building
  • 3 days Retired RAF pilot wins legal challenge over a wind farm
Is The Caribbean Ready For An Oil Boom?

Is The Caribbean Ready For An Oil Boom?

The Caribbean is shaping up…

Deep Oil Cuts Put Africa At Serious Risk

Deep Oil Cuts Put Africa At Serious Risk

Oil prices continue to recover…

Can Venezuela Rebuild Its Crushed Downstream Sector?

Can Venezuela Rebuild Its Crushed Downstream Sector?

U.S. President Biden’s installation in…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Oil Recovers From Last Night’s Nosedive

The latest crude oil price rally was nipped in the bud last night by the news that 15,000 new coronavirus cases had been diagnosed in the Chinese province of Hubei, Bloomberg reports, noting that the health authorities had changed their method of counting the cases, including “clinically diagnosed” patient to the total count.

But oil recovered on Thursday morning, recouping yesterday’s loss.

Oil prices started to improve earlier this week on reports that the outbreak might have peaked, although some medical professionals warned against over-optimism. As the latest from the province of Hubei, where the outbreak began, shows, the optimism that pushed prices higher was a bit premature.

Interestingly, the price rise withstood a third weekly inventory build in the United States, as reported by the Energy Information Administration yesterday. That’s despite the heightened price volatility that oil markets have seen lately. Even so, prices are still in a bear market after shedding 20 percent in just 19 days last month, the Wall Street Journal reported yesterday.

The bearish sentiment may well dominate markets this year despite the occasional burst of optimism. There are simply too few reasons to be bullish.

OPEC is finding its harder than usual to convince Russia to agree to a proposed additional cut of 600,000 bpd in OPEC+ oil production in response to the expected—and already happening—slump in demand from virus-stricken China.

Shale oil producers, although many of them are struggling at these oil prices, are still expanding production. This effectively puts a cap on how high prices could rise, regardless of what OPEC does. Related: Why China Shuns U.S. LNG Despite Trade Deal

There is a chance that Libya’s crippled production could begin rising again soon if the Government of National Accord and the eastern government-affiliated Libyan National Army come to an agreement to stop fighting. If they do, the oil port blockade that caused a slump in production of over 1 million bpd would be lifted. The likelihood of an agreement is considerable: if Libya does not export oil, everyone suffers.

After oil prices swung into contango, traders have started hoarding oil offshore in anticipation of better demand times. This will add to the global overhang, also exercising downward pressure on prices.

Both the Brent and WTI benchmarks were trading up, with WTI trading at $51.17 and Brent trading at $56.28 at 11:18 am EDT.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News