After returning to the rise, what is waiting for oil prices?

After returning to the rise, what is waiting for oil prices?

Oil prices returned to rise again, and reached a barrier of $ 40 a barrel, hoping to remain at the same level, and analysts are likely to increase oil prices in the short term, but the risks remain high. Writer Nick Cunningham says, in a report published by the American "Oil Price", that the German Commerzbank reported that the discipline in the regulation of production quotas with OPEC countries, along with the decline that was not programmed in American production, and the rapid recovery in demand on the one hand Other; All of these factors led to consumption of the surplus production that was before it more quickly than expected. The writer mentioned that West Texas crude reached $ 40 a barrel, and then decreased slightly in recent days, but it appears stable at the present time at that level, which some consider the new normal price of oil.

To spread to the most important global markets, there is concern about the length of time needed to overcome the effects of the virus. " In this context, Merrill Lynch of Bank of America says, "As we move towards the next year, we believe that activity in the transportation sector will recover faster than we initially expected, and that OPEC Plus countries will refrain from producing additional quantities and reduce their production beyond what we expected before 3" Months".

Return high prices The slight rise in prices is due to 3 main factors: the return of demand in the markets, the large decline in production, and the commitment of OPEC Plus countries to manage the markets appropriately. The Bank of America believes that after the markets witnessed an oversupply of 11 million barrels per day during the first half of 2020, this number quickly reversed, with a deficit of 2.5 million barrels per day recorded. The same source also pointed to the strong return of oil demand in China, as a good reason for optimism about the rise in prices, despite the fact that the consumption of aviation fuel will decrease, and the companies producing it will suffer more damage. If the OPEC Plus countries continue to commit to reducing production, and demand continues to rise; The price of Brent crude may reach $ 60 during the next year.