Thursday, 01 April 2021 07:23

Oil running in place amid large reserves

According to trading data, global oil prices ended up with a decline by more than 2% at the close of Wednesday’s trading. However, there was a more than 20% growth registered at the end of the first quarter.

Following the results of Wednesday's trading, the price of June futures for crude fell by 2.7% to $ 62.74 per barrel, and the price of May WTI futures — by 2.3% to $ 59.16 per barrel. Today, Brent regained 0.45%, making $63.20 per barrel in the morning.

Brent and WTI crude oil rose by 21 and 22% in the first quarter respectively.

Expectations for global economic growth in 2021 have been raised from 4.8% to 5.1% since the last meeting of the OPEC+ monitoring committee, but this forecast may be revised, OPEC Secretary General Mohammed Barkindo said during yesterday's meeting of the committee.

According to him, this forecast is based on uncertainties, such as the spread of COVID-19 virus mutations, uneven vaccine supplies, the continuation of quarantines and the beginning of the third waves of the pandemic in different countries, as well as inflationary pressure.

"Moreover, we also saw oil futures move into contango for the first time since mid - January, although they returned to backwardation again as markets digested the Suez Canal lockdown," he said.

Barkindo said that the estimate of global oil demand in 2021 will be slightly revised to 5.6 million barrels per day (the previous one was 5.9 million b /d).

"Barkindo noted that “oil supplies from non-OPEC countries (the report includes also OPEC+ countries) are projected to grow by 1 million b/d in 2021, compared to 0.7 million b/d expected previously (March 3, according to the OPEC report in mid-March), while the forecast for liquid hydrocarbon supplies from the United States remained unchanged, assuming an increase of 0.16 million b/d in 2021”.

In mid-March, OPEC raised its forecast for the growth of supplies of liquid hydrocarbons from non-OPEC countries, mainly due to the revision of the estimate for Russia, proceeding mainly from the results of 2019, as well as 2021.

Preliminary data for February show that commercial stocks in OECD countries decreased by 45 million barrels compared to 14 million barrels in January, but the level of stocks is 95 million barrels higher than in the same period last year and 58 million barrels higher than the average for the period 2015-2019.

The OPEC Secretary General particularly noted the contribution of Saudi Arabia to the reduction of reserves in the form of voluntary restrictions on oil production by 1 million b/d.

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