Although Baker Hughes reported an increase in the number of active drilling rigs in the United States on Friday, oil prices continued to see increases on Friday afternoon.
At 16:19 EDT, WTI crude was still up 1.32% that day at $ 56.97. Brent was still up 1% that day at $ 59.44 – dangerously close to the $ 60 psychological threshold.
Last week, at this time, the spot price for Brent was only $ 55.04. The gain of nearly $ 5 is due to a combination of factors, including a sharp decline in crude oil stocks in the United States, continued tightening of OPEC + production, rising Aramco crude oil prices for Europe, drunken U.S. traders drunk on stimulus talks and whispers of a general tightening oil market.
These are really bullish signals. But can this upward trend last amid blockage extensions and oil demand that simply do not yet exist?
When a stimulus agreement is reached, oil prices are expected to rise – this is certainly still optimistic. But on the one hand, the level of oil demand is still lagging behind, and some analysts do not demand a full return of demand for years – if ever.
The EIA, for example, does not see US energy consumption in full return for another eight years. This is definitely on the bottom.
Will OPEC be able to hold back the supply floods until then? Can they afford not to? Russia continues to eat to increase its oil production, with the suspicion of opening the door to American shale producers. For now, Saudi Arabia is happy to take one for the team, it has resigned to reduce production, so others in the group will continue with at least some of the cuts. For now, OPEC’s actions are rising.
The EIA sees US oil production setting new records, but not until 2023.
However, Goldman Sachs is still climbing, demanding $ 65 Brent by mid-year with WTI in the 1960s.
However, Rystad Energy sees a correction in prices on the horizon.
“Many technical indicators are flashing red, so a price correction soon would not be surprising,” Rystad said on Friday, according to Oilfield Technology.
By Julianne Geiger for Oilprice.com
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