The strong rebound in oil prices was abruptly suspended due to signs of weak demand in major markets, the Financial Times website reported March 19, entitled “oil prices have suffered the biggest weekly drop since October last year due to concerns about demand.”. Oil prices have experienced the biggest weekly decline since october2020.
Brent crude oil prices closed down nearly 7 per cent this week to $64.53 a barrel. The US West Texas Intermediate base crude oil price also fell similar to $61.42 a barrel.
The drop, the report said, has put the brakes on the almost uninterrupted rebound in oil prices this year. Since the beginning of November 2020, with the reopening of the world’s measures to lift the epidemic blockade, the prices of Brent crude oil and West Texas Intermediate base crude oil have risen by more than 60%.
| ferric sulfate (Poly ferric sulphate) |
But analysts said oil prices had already oversupped after Brent crude broke the $70 a barrel last week, the report said. Traders are focusing again on signs of a resumption of blockade measures in parts of Europe and the continued weakness of real demand between China and the United States.
“I think oil prices are catching up in terms of the actual demand for crude oil from China and the United States,” said Christopher page, senior oil market analyst at Rustad energy in Norway
Meanwhile, US oil stocks have increased as it takes longer than expected for petrochemical plants to return to operation after Texas’s energy production sector has been frozen. The energy information agency reported an increase in oil inventories of 2.4 million barrels.
“The market feels a bit too much for the time being, and macro conditions and general optimism about vaccines have helped to support the rise in oil prices,” said Paul hosnell, head of commodities research at Standard Chartered Bank, the report said. The severe test of the fall in oil prices has been a long time since, so it takes just a few things to act as a catalyst to get the ball rolling. ”
Some analysts say the weakness in the oil market is unlikely to continue. They believe that oil demand could still rebound strongly later this year as the vaccine program accelerated (despite short-term problems in Europe) boosted travel and broader economies.
Analysts say the fall in oil prices may be partly related to the rise in US Treasury yields, which have curbed investors’ risk appetite.
Michael tran, commodity strategist at RBC Capital Markets, advised investors to “wait for the fall to end,” the report said.
“The market is rarely straight and we think global oil demand will see a strong rise in the summer and the current weakness period should not affect our forecast for this outlook,” he said
The report also said that after four consecutive days of falling, Brent crude oil and West Texas Intermediate base crude oil prices rose by about 2% on the 19th, partly because a refinery in Riyadh, Saudi capital, was attacked by drones.
Saudi energy ministry said oil supply was unaffected. But before that, other attacks on the country’s oil facilities have been made in the near future. Iran backed Yemeni Husser claimed responsibility for the attacks.
Goldman Sachs and other Wall Street banks forecast further oil prices to rise, based on long-term concerns that oil demand in major economies around the world is stronger and new supply investment is being cut too much. Goldman said it still believes Brent crude oil prices will rise to $80 a barrel this summer.
| http://www.lubonchem.com/ |