Oil price makes swift recovery defying the doom and gloom

 

Oil price recovery Monday

The price of crude oil recovered on Monday defying the worst-case scenarios as the world still needs oil to function in a normal way. As of 15:00 GMT, the prices of WTI and Brent were $71.88 and $75.77 respectively.

Most analysts hoped that the prices would recover gradually; many, however, did not believe the initial recovery - by over 5%  - would be that swift.

Usually, the oil price recovers slowly in the event of a big crash like what we saw on Friday. This time, however, the prices recovered from the precipitous fall in just two days.

There are two possible factors behind the quick recovery: the Omicron variant of the coronavirus, according to the South African doctors who discovered it, is not as deadly as initially feared; the other was the evaporation of hope of a possible breakthrough in the current talks on reviving the JCPOA in Vienna, Austria.

Although the talks between Iran and the signatories to the JCPOA, 2015 Iran nuclear deal, started on Monday, the hope for a quick resolution was dashed by a joint statement issued by the British Foreign Secretary and her Israeli counterpart on the eve of the new round of negotiations, in which the former made the British position clear with regard to the Iranian position on the issue.

Referring to the article, a spokesman of the Iranian foreign ministry condemned the move by Israel to derail a potential, successful outcome of the talks.

Although Iran expects a success during the talks, it has been accusing the US of derailing the very goal, placing lots of obstacles along the path to the goal.

On the part of Iranians, they want a binding agreement that does not change from one administration to another – in a matter of 4 years when the occupation of the White House changes from the Republicans to the Democrats – a major bone of contention between the two sides.

The postponement of the OPEC+ meetings by one day may have also stemmed from the same development. The concerns of the main players of the OPEC+ must have been elevated when Iranian officials of the oil industry sounded optimism while highlighting how much Iran can contribute to the global supply in the event of the sanctions against it being lifted – something that the desperate US administration likes to hear about.

Iran simply wants to sell as much oil as possible in the shortest period of time to boost is coffers; Iran has to address a catalogue of economics and social issues as a matter of urgency, especially in the aftermath of the Coronavirus crisis.

The Iranian factor may already have been under discussion by the key players of the OPEC+. By mid-week, we may be able to get a sense of the way OPEC+ is going to deal with it in the near future.

Popular Posts

Wil Iran attack Israel soon? Only time will tell!

Image
  Credit: Google Maps With Iran's threat against Israel in a direct strike, the tension in the Middle East went up a few notches on the scale of uncertainty, as the United States made it clear once again that it would not be a passive observer if a conflict erupts. The rising tension came in the wake of the daring attack carried out by Israeli F-35 fighter jets on the building that was adjacent to the Iranian embassy in Damascus, the Syrian capital. Seven Iranian nationals, along with a few Syrians, died in the attack, two of them were from the elite Iranian IRGC - Republican Guards; they were very high ranking officers. In response to the attack, Ayatollahs Ali Khamenei, the Iranian  supreme leader, said that Israel will be punished in kind, during an Eid message on Wednesday; he did not imply in what form the retaliation could come; nor did he say whether it was imminent, leaving the ambiguity open to interpretation by military and political analysts. The supreme leader, however,
Read more

Will Venezuela manage to extend the period of waiver of sanctions?

Image
  Chart:www.oilfutures.co.uk | Data: OPEC As the 53rd JMCC, Joint Ministerial Monitoring Committee, of the OPEC+ is scheduled to take place on April 3, analysts are looking at every possible scenario that could rise in the aftermath of such a meeting. A consensus has already emerged among them that the OPEC+ would stick to its production quota for each member country. That means the official position of the OPEC+ will maintain the current production cuts as long as necessary, without increasing the production to appease the influential customers.  The cartel wants to stick to the production targets, already agreed upon, in 2024 without unnecessarily worries about the potential consequences.  With the OPEC+ sticking to it guns, without increasing the output, the top consumers of oil turned to Venezuela to buy it on the cheap as the former was given a waiver to increase the production and then sell, provided that free and fair elections will be held before the waiver expires. Venezuela i
Read more

The trend in China's Oil Imports in 2023: the stagnation of the prices is partially explained!

Image
  www.oilfutures.co.uk The data from 2023 clearly shows that China, the world's top importer of crude oil, is a factor that cannot be ignored when it comes to the stability in the crude oil markets. The trendline, based on the crucial crude oil import volumes, shows a gradual, not a steep, decline in line with the fluctuating manufacturing activities. The trendline of China's Purchasing Manager's Index, PMI, followed a similar pattern in 2023. There was a relative surge in crude oil imports in February on account of heavily discounted Russian oil after the war broke out between Ukraine and Russia. Both China and India cashed in on the unbelievable bonanza, defying international pressure, citing the domestic interests.  In August last year, there was a relative increase in the imports: In September, China's PMI, Purchasing Manager's Index that reflects the nation's manufacturing activities remained above the threshold - 50%. Analysts, meanwhile, are awaiting the
Read more

Latest Energy News from EIA