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Showing posts from September 20, 2020

Inventory draws and supply constrains will stabilize oil prices - EIA

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  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

US Oil Exports are on decline since the Covid-19 Crisis

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  Global oil prices are to seesaw around $40.00 a barrel for some time owing to yet another supply glut. The EIA, the US Energy Information Agency, reports a steady decline in US exports since February, which can only indicate a fall in global demand in proportion. Since producers are beginning their activities, even at a slower pace, that can only mean the expansion of the supply side of the equation; for most, if not all, of them, it’s a matter of stay relevant in the sector in the long run. The burden on the supply side that weighs on the market did get little help from the news that China has slowed down oil imports – a far cry from its inventory building spree in April-May period. In India, meanwhile, the demand in diesel has fallen rapidly as coronavirus infections go up unabated. Even India that saved above $685 million with its accelerated oil stock building may see little enthusiasm to expand the activities on this front, due to both logistical reasons and demand conce

Making hay while the sun shines: India saves millions of dollars by buying on the cheap

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India saved more than 685 million US dollars by going on an accelerated buying spree during April-May period, while cashing in on the record-low oil price. Accoring to petroleum minister of India, the country managed to store the crude oil in underground, strategic oil storage facillities. With that, says the minister, India is in a position to deal with any contingency.  India could not believe its luck when they saw the opportunity, because in January at the beginning of the year, India used to buy the same at $60 per barrel. India boosted its strategic oil reserves by paying just $19 per barrel, while acquiring a record 16.7 million barrels.  With a record stock of this nature, it can manage the demand in the coming months comfortably and in the event of a steep price hike, it can even make a hefty profit by disposing of some of the reserves. This has been the creative thinking pattern of the big Three, the US, China and India, the biggest oil consumers in the world, when they saw t

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