After a tough year for oil traders with some blue chip equity reaching 20-year lows, short-lived enthusiasm for the Covid vaccine has led to oil prices falling again at the end of the week.
On Thursday, the IEA reiterated the sentiment of other skeptics, saying, “It’s too early to know when and when the vaccine will resume normalcy.” With this in mind, he said the outlook remains poor for production and transportation, and due to the demand and price of oil.
“We’ve seen a lot of effort and we’ve seen it,” said John Kemp, analyst in the Reuters market. “The coronavirus vaccine is expected to promote international passenger transport and oil consumption, but based on Monday’s futures price movement, the first significant impact will not be felt until late 2021,” analysts in the Reuters market said.
Reflecting IEA concerns, OPEC’s recent MOMR revised its forecasts for oil demand and prices downwards. He said that demand will be “severely stunted” by the OECD economy’s “slow-down” demand in transportation and industrial fuel demand until at least mid-2021.
Furthermore, vaccines may provide some mitigation to these pressures, Brexit, geopolitical challenges, global debt levels, and social unrest caused by community inequality, but they all represent significant downside risks.
Speaking about PEC MOMR, Julianne Geiger, editor of Oflprice.com, said: OPEC also said this weak demand will continue until next year. OPEC, which also cuts demand for next year’s demand, expects oil demand in 2021 to be 300,000 bpd lower than expected last month. This means that oil demand in 2021 is only 6.2 million bpd at 2020 levels and still below 2019 levels. ”
With the announcement of the Pfizer vaccine and subsequent celebrations by airlines, finance and oil, Brent crude reached $43.80, the highest level since September. The market closed on Friday afternoon, down 1.26% from the previous day, while WTI crude fell 1.80%.
