Weekly Oil Price: IEA and Russia predict a big drop in demand
The uncertainty that hangs over the oil markets shows no
sign of abating.
The Chinese crude oil stocks do not diverge from storage facilities
as fast as analysts thought they would, leaving many tankers waiting at the
ports.
To make matters worse, Russia’s oil minister said that he
would expect the global demand falling by 9 to 10 million barrels per day – an alarming
scenario, when the producers can least afford to do it.
This forecast is much more worse than what the IEA, International
Energy Agency, did recently – a fall of 8.1 million barrels per day.
Since the world, especially the developed world, could not
keep Covid-19 at bay, the above doomsday-scenarios could only get worse, if the
so-called second wave comes back with full force in the fall or beyond.
In this context, the bone of contention between Turkey and
Greece in the Mediterranean over gas exploration, US-China trade wars,
skirmishes between India and China over the shared border and the developments
in the South China Sea could only add fuel to the fire.
In addition, the hyperactivity on the Green front has
dwarfed the PR moves by the oil and gas industry; their muted responses are
hardly becoming magnets to potential investors.
Even the big players in the oil field have chosen to walk the tight
rope, rather than getting engaged in a propaganda war.
The collective move by the oil exporting countries to look
for alternatives and diversification of their economies reflects the impact of
the eddy currents that have been hampering the courage to take decisive steps
to reverse the trend.
Oil markets behave nervously despite many indicators from
the industry that fossil fuels are her to stay for years to come.
