Inventory draws and supply constrains will stabilize oil prices - EIA

 

EIA forecast

The production cuts by the OPEC+, coupled with continuous inventory draws, are going to stabilize the oil prices according to the latest report by the EIA.

Based on the latest forecast, the stability may be already in the markets, which is often shadowed by unusual daily fluctuations, triggered by sentiments of a given day.

More often than not, these subtle factors do not directly influence the crude oil prices and yet markets respond to them.

Al though the second wave of coronavirus is upon us, the activities haven’t come down to a screeching halt as they did during the first wave – at least at the beginning.

For instance, there is considerable traffic on the roads in Europe despite strict lockdown rules; schools are still open and so are shops and supermarkets with strict guidelines on preventive measures.

If people take heed of the advice of the professionals in the health sector, we may see a turn-around in about 2 to 3 weeks in line with what we witness in the rest of the world.

Both New Zealand and Australia managed the second wave well despite the doom and gloom that prevailed at the beginning.

In short, the significance of Covid-19 as a determining factor of crude oil prices is slowly losing its lustre and so will the anticipated economic woes between the powerful nations, when the leaders in question realize that this particular game is in no one’s interest.

Here are the live charts for you to see the trends:

Oil price charts that matter

 

 

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