Black gold rises in price against the background of a gradual easing of restrictions imposed in connection with the pandemic coronavirus that spur demand for petroleum products. The surplus on the oil market reduced in recent weeks that also has quotes of support. The oil market is finally will soon be balanced,’ ‘“ said the expert consulting company Rystad Energy Bjornar Thonhausen, quoted by Dow Jones.
On Monday, Russian energy Minister Alexander Novak said that the market begins to balance, since it took about 14-15 million b/d of oil taking into account transactions of OPEC, and the decline in other countries, but the current surplus of oil remains at 7-12 million barrels per day. The Ministry of energy expects that by growing consumption market could balance out in June-July.
Oil demand in China in the second quarter of 2020, will recover to 13 million barrels per day (b/d), which is 16.3% higher than in the first quarter of this year, predict analysts Wood Mackenzie. However, for the second quarter of 2019, the demand for oil will decline by about 2.5%.
The experts at Julius Baer increased the forecast for oil prices for the next three months. Concerns about oversupply in the oil market moved into the background. Signs of recovery of demand and significant supply reduction support the growth of quotations. Given the more positive fundamental Outlook, we raise our forecast for oil prices for the next three months to $40 a barrel,’ writes the chief macroeconomist and head of advanced studies Next Generation Julius Baer Norbert Ruecker.
Meanwhile, the data that was read by Interfax’ on Monday show that Russia has cut production this month to a level nearly corresponding to the terms of the deal, OPEC+. According to these estimates, the daily average oil production in Russia may amount to 8.63 million barrels a day (b/d), with the goal of 8.5 million b/d for the OPEC agreement+. In addition, the recent decline in oil reserves, as well as reducing the number of operating oil rigs and shale oil in the United States eased concerns about oversupply, notes S&P Global Platts.
Oil production in the United States last week amounted to 11.5 million b/d, which was the minimum level since October 2018, according to data Services energy information (Energy Information Administration, EIA), the energy of the country. The production level was 1.6 million b/d lower compared to the March peak.
The cost of July futures for Brent crude on the London ICE Futures exchange to 17:55 MSK is $35,73 per barrel, or $0.20 per (0,56%) above the price of closing of previous session. Futures for WTI crude oil for July in trading on the new York Mercantile exchange (NYMEX) by this time had risen by $0,70 (2,11%) to $33,95 per barrel.