• 2 minutes U.S. Presidential Elections Status - Electoral Votes
  • 5 minutes “Cushing Oil Inventories Are Soaring Again” By Tsvetana Paraskova
  • 7 minutes United States LNG Exports Reach Third Place
  • 40 mins Joe Biden's Presidency
  • 1 min The World Economic Forum & Davos - Setting the agenda on fossil fuels, global regulations, etc.
  • 22 hours https://www.prageru.com/video/whats-wrong-with-wind-and-solar/
  • 17 hours Here it is, the actual Complaint filed by Dominion Voting Machines against Sydney Powell
  • 14 hours Is the Chinese CCP Following the Left's Leadership, or the Left Following the CCP's?
  • 4 hours Did I Miss Something?
  • 2 days JACK MA versus Xi Jinping
  • 1 day CNN's Jake Tapper questions double amputee purple heart recipient GOP Rep's commitment to democracy. Tapper is a disgrace.
  • 1 day 'Get A Loan,' Commerce Chief Tells Unpaid Federal Workers
  • 1 day Minerals, Mining and Industrial Ecology
  • 1 day Do Republicans like Liz Cheney, Adam Kinzinger, Mitt Romney and now McConnell think voting for Impeachment can save the party ? Without Trump base what is the Republican constituency ? It's over.
  • 2 days Researchers Are Harvesting Precious Metals From Industrial Waste
Why Oil Will Keep Rising In 2021

Why Oil Will Keep Rising In 2021

While new lockdowns around the…

Tom Kool

Tom Kool

Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations

More Info

Premium Content

Oil Prices Rise On Hurricane Outages

Oil prices rose on Tuesday afternoon, ahead of the weekly crude inventory data releases, but traders remain concerned about the pace of the recovery in global oil markets. 

After a sobering OPEC report on Monday, the IEA published its updated demand forecast for 2020, revising its previous outlook downward by 200,000 bpd to 91.7 bpd, slightly more optimistic than OPEC’s 90.2 million bpd forecast.

After a few months of quick demand recovery, the International Energy Agency now sees headwinds for further recovery of crude demand, expecting the pace of recovery to slow down significantly as most of the ‘’easy gains’’ are already achieved. 

While most analysts and energy executives remain concerned about the slowing demand for road fuels as driving season in North America comes to an end, it’s jet fuels that represent the largest mid to long-term threat for oil markets.

Industry executives even went as far as saying that refiners should recalibrate their product output away from jet fuel, if possible at all.

The IEA also cut its forecast for crude inventory draws for the last few months of 2020, saying that commercial crude stocks hit an all-time high of 3.225 billion barrels in July.

Large oil traders such as Vitol and Trafigura are said to have started to charter tankers for floating storage as markets are once again looking at a steeper contango, a situation where the future price of a commodity is higher than the expected spot price or front-month contract, pointing at a ‘supply-heavy’ market in the near-term.

The positive news for crude markets this week could come from OPEC and partners, which are set to meet on Thursday. The cartel is unlikely to make deeper output cuts, but strong compliance and compensation for the missed target could offer some support to the markets.

Additionally, Hurricane Sally, a category two hurricane, threatens both Gulf of Mexico operations and Gulf coast refiners as slowly barrels towards the Louisiana coastline. Around 25 percent of crude production has been shut-in, but offshore drillers are already preparing for a quick resumption of production.

The Gulf of Mexico shut-ins led to a small bump in oil prices on Tuesday morning. At 11:45 AM ET, WTI crude traded 2.25% higher at $38.10, with Brent crude rising above $40.

By Tom Kool of Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Christina Stow on September 15 2020 said:
    Hi Tom, I thought your article had a very optimistic approach, even though things are slowly changing. With Hurricane Sally about to hit land, the ongoing pandemic, and driving season coming to an end, how long do you think it will take to turn the industry around? I look forward to reading more articles you publish.

Leave a comment




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