Because the oil won’t splash too much. Report
Petroleum. what analysts at the Oxford Institute for Energy Studies (OIES) predict
Despite the rising prices so far this year, and despite the expectations of an improvement in global oil demand, especially by the end of the year, the market has nothing in itself capable of triggering a "super cycle" of oil and push prices around $ 100 a barrel. This is unless there are large, completely unexpected market shocks. That's what analysts from the Oxford Institute for Energy Studies ( OIES) said in their latest short-term monthly forecast.
COMPARED TO 2020, THE PERSPECTIVES FOR OIL ARE COMPLETELY DIFFERENT
“April 2020 was the worst month ever for oil on market equilibrium, prices and sentiment. The oil market saw the largest year-over-year contraction in global demand, which reached a staggering 23.3 million barrels a day. Brent prices plummeted to an 18-year low, with an average of $ 23.3 a barrel – the British analysts highlighted -. Combined with storage pressures and negative sentiment following the breakup of the OPEC + deal in March 2020, April 2020 will be remembered as the darkest month in oil market history. A year later and the prospects for the oil market seem fundamentally different ”.
OIL PRICES, STOCKS AND MARKET DEFICIT IN 2021
To mark the differences, it is enough to take into consideration the prices which, according to the Oxford analysis "have recovered 98 per cent from the collapse in April 2020 to over 60 dollars a barrel to reach an average of 65.2 dollars a barrel in March. 2021; the market moved into deficit; OECD stocks are approaching their 2015-2019 average. This impressive recovery has taken place despite the wide uncertainty surrounding the demand for oil and the fact that it has yet to fully recover its pre-pandemic level ”.
ALTHOUGH A REBOUND IN DEMAND IS EXPECTED, UNCERTAINTY STILL REINDS
“Our estimates suggest that global oil demand in Q1 2021 stands at 4.9 million barrels per day below 2019 levels. And although the dominant expectation is that oil demand will rebound strongly in the second half of the year. 2021, when countries lift restrictions and global economic recovery accelerates, uncertainty over the timing and pace of the rebound remains high, ”the report highlighted.
SUPER CYCLING IS IN THE FORECASTS OF JP MORGAN AND GOLDMAN SACHS
Unlike the Oxford Institute with oil prices soaring earlier this year, some banks, including JP Morgan and Goldman Sachs, said in February they expected a new oil super cycle, with economies recovering from the pandemic shock last year, as reported on Oilprice .
FOR THE AIE, NO SUPER CYCLES IN SIGHT
The International Energy Agency ( IEA ), however, does not see an oil super cycle on the horizon thanks to an abundant supply and large global reserve capacity.
“The sharp rise in oil to around $ 70 a barrel has prompted talk of a new super cycle and looming supply shortages. Our data and analysis suggest otherwise, ”the AIE said in its March oil market report.
PRICES DOWN DUE TO THE EXTENSION OF LOCKDOWN
From soaring to 70 a barrel in early March, oil prices have now fallen by more than $ 5 a barrel, with Brent Crude trading at around $ 64 in recent days, weighed down by concerns over the recovery in demand due to the renewal of lockdowns in the main European economies.
THE TRIGGERING FACTORS TO OCCUR A SUPER CYCLE ARE MISSING
In short, the OIES analysts wrote “the recent rebound in oil prices does not yet signal the beginning of the next oil super cycle, as the key triggers are still missing. Those missing triggers are the inelastic supply between increasing demand, lack of space capacity and refinement constraints ”.
“Oil prices will depend on the pace of demand recovery and are likely to trade in the $ 59-69 per barrel range for the remainder of 2021 and 2022 on an annual basis. Monthly oil prices will be limited to a range of $ 54 to $ 74. Even if market sentiment pushes prices beyond these ranges, they are unlikely to be sustainable – according to OIES analysts -. In order for prices to reach anywhere from $ 100 a barrel, we need to consider other shocks, ”they concluded.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/perche-il-petrolio-non-schizzera-troppo-report/ on Sun, 18 Apr 2021 15:04:04 +0000.