In 2020, oil demand might not grow at all, reports Bloomberg with reference to the participants one of the largest industry conferences held in London. Like in the last 40 years occurred only three times.“We are seeing the weak economic performance of China, which reflect the impact of the virus,” explained David Lennox from Fat Prophets, “Now we have other countries that are experiencing widespread and impact of coronavirus. And this will contribute to this bearish sentiment”.
Earlier the Financial Times reported that at the forthcoming meeting of the parties to the agreement OPEC+ Saudi Arabia, in all probability, raise the question of further production cuts. Moreover, the readiness to reach agreement, which will allow to stabilize prices, said the Secretary General of the oil cartel Mohammad Barkindo.
The similar statement was made by Russian President Vladimir Putin, who noted that last week was the worst for the world oil market since the 2008 crisis. The Russian leader said that Moscow is ready to actively engage with partners at the global oil market, noting the importance of cooperation in the framework of OPEC+.
On Monday oil quotations returned to the green zone. North sea Brent blend has risen above $50, adding in the course of trade of 1.67%. However, before this growth, the fall lasted 7 sessions in a row. At the moment the price of may futures dropped to $48,40 per barrel.
Market participants expect to stop the drop in oil prices by reducing production. However, this work with the proposal. But the drop in demand, they won’t be stopped. According to Bloomberg, oil companies and traders expect demand growth for the black gold in the range of 200 thousand to 700 thousand barrels per day. Previously, their assessment of demand decreased IEA: after the outbreak of coronavirus, the Agency announced a possible increase in demand 800 thousand barrels per day. This is a third below the previous estimates and well below the average of the decade to 1.3 million barrels per day.
“The idea of the demand changes every minute,” – said Giovanni Serio of Vitol Group, — “In China, there is a slight recovery, but the activity, including traffic levels remained below normal.”
Vitol lowered the forecast demand growth of up to 700 thousand barrels per day in its most likely scenario, compared to pre-crisis forecast of 1.2 million barrels per day. However, in parallel, the company began to develop an alternative scenario that includes a global recession and reduced oil demand in 2020. Source
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