US, WASHINGTON (ORDO NEWS) — “We’re going through an unprecedented period of deflation,” the New York Times announced on Tuesday, the morning after oil prices went to negative territory. WTI fell to the unimaginable – $ 37.63 per barrel.
Coronavirus created unprecedented chaos in the global economy, stopping the work of industrial sectors and countries around the world against the backdrop of quarantine. Economists have warned that all this will result in a major economic downturn, with only a few able to predict the absurdity of negative oil prices.
Few. But still there were those who managed to foresee them. Three weeks ago, on April 1, CNBC published a report, “Oil prices could soon go to negative territory, as storage is full, analysts warn,” which accurately predicted everything that is happening now.
“World oil storages can be full in a few weeks, as consumption has fallen sharply due to the crisis with coronavirus, and some of the world’s most powerful oil producers have begun to increase production,” analysts said.
In such an unprecedented situation, it is impossible to predict the further development of the situation in the oil market. Some experts are preparing for the rise in oil prices. Although oil prices are now lower than ever, “one energy fund considers the oil price at $ 100 a barrel likely,” the Midland Reporter-Telegram reported this week.
At the time of preparing the report, oil was at an 18-year, rather than a historic low. The introduction to the article said: “But first, prices should fall even more,” so that their wish came true.
Oil prices have fallen sharply over the past 2 months, so the Energy Opportunity Fund rose 20.2% in March after falling in the first 2 months of the year. Thus, the fund grew by 3.7% in the first quarter, after US oil futures fell by 66% – “their worst quarter ever, Midland Reporter Telegram reports:”
The fund, which grew by 40% last year When purchasing shale companies in the USA, he turned his attention to filling oil storage facilities in different parts of the world, especially in the largest American hub in Cushing. Due to too much oil and the lack of storage space, Cushing can fill up to the limit by mid-May, which will lead to an imbalance in the market. The next step is a drop in prices.”
All this indicates the upcoming rise in oil prices. And while the world seeks to reduce oil production, the ground is being created for a bull market. “We think that oil demand will normalize very quickly. And next year we will encounter an unprecedented level of use of reserves, and the world will quickly run out of free capacity,” said Jean-Louis Le Mi, Westbeck CEO.
This collapse will mean that more and more shale producers will have to reduce production. The stops and conclusion of a recent deal by OPEC and its allies to reduce production will form the basis for price recovery in the coming years. ”
American shales have already experienced a serious recession as West Texas deposits are outdated. Now, amid falling oil prices at the Perm bankruptcy field and tens of thousands of laid-off employees. Therefore, when everything is normalized, there will be a lack of free capacity. Low supply and high demand. This is how it works. So it’s worth getting ready for the price of $ 100 per barrel.
Contact us: firstname.lastname@example.org