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Even if/ when an agreement to cut oil production is reached supply will still exceed demand for at least the next quarter. I suspect Brent crude will average in the high $30 for 2020 and high $40 s for 2021. International travel will remain severely reduced for at least a year and even road transportation will remain subdued now that people will have adapted to home working on large parts of the economy. Throw in a deep world recession and you have to be an extreme optimist to see oil prices reaching and holding a $60 average before 2022
https://uk.finance.yahoo.com/news/oil-drops-over-1-oversupply-023242192.html. https://www.bloomberg.com/news/videos/2020-03-25/vitol-says-oil-demand-is-down-as-much-as-20-million-barrels-a-day-video
BlooBird,
You may well be right, but my view is that Trump/Putin/ MBS/ will keep in the 30's, as they have no choice as of now.
JiffyBag
You wrote "can see the Oil price staying in the $30's until at least late June"
I think we'll be lucky to see PoO staying in the £30's until at least late Thursday.
For now, like it or not...the Elephant in the room is Global Demand, can see the Oil price staying in the $30's until at least late June, can you see any difference?
I was, like Captain Mainwaring, waiting to see who would be the first poster to spot that!
I suppose if each country cuts output unilaterally, they will have jointly cut production!
"Norway, which hasn’t joined any production cuts since 2002, signalled over the weekend it was ready to cut unilaterally its output if others did"
I do not think that word ('unilaterally') means what they think it means.
BAGHDAD, April 5 (Reuters) - Iraq’s oil minister is optimistic about reaching a new deal among producers to reduce oil output after phone calls with some of his OPEC+ counterparts, his ministry said in a statement on Sunday.
Oil minister Thamir al-Ghadhban said any new deal needs support from key producers from outside the OPEC+ alliance such as the United States, Canada and Norway.
https://www.reuters.com/article/global-oil-iraq/iraq-oil-minister-says-new-oil-deal-needs-support-from-key-oil-producers-outside-opec-idUSL8N2BT0JJ
Oil-producing countries know that either they reach a diplomatic accord to cut, or the market will force production shut-downs on them, as storage both on land and at sea fills up.
There were also signs of progress: Norway, which hasn’t joined any production cuts since 2002, signalled over the weekend it was ready to cut unilaterally its output if others did, and a senior official from the oil-rich Canadian province of Alberta said it will dial-in on the oil meeting.
Saudi Arabia, which launched a price war last month with Russia after OPEC+ talks broke down, has made clear that it won’t cut production unless other producers -- including the U.S. -- also hold back supply. But Trump said on Saturday: “I don’t care about OPEC,” a “cartel” he’s opposed all his life.
https://www.bloomberg.com/news/articles/2020-04-05/oil-negotiators-race-for-deal-to-stem-rout-as-leaders-snipe
Bloobird,true but at this prices is neither good for SAUDI nor for RUSSIANS, also it will destroy the US shale business too.
I think cuts are the only way now and also cuts from US.
They said 60% cuts from US if price stays around 20s.( that will be forced cuts by shutting down of oilers because of not viable prices)
Thanks LW,that explains.
maqsood7
I don't think PoO is going to be $34 for very long.
Unfortunately, I think it's going to drop like a stone when people realise that Trump's 10 million bpd drop is wishful thinking.
There are still people shorting HUR, maqsood, but no longer any at or above 0.5 percent.
Based on the latest figures, shorts total 0.81 percent.
I thought we will do better than others in rise of oil prices.
PMO is heavily shorted also tlw is around 7%,but currently no short on hur.
Also brent at 34 will give better boost here.
Lets see what coming week brings here.
Is 20p achievable here?? As brent at 34??