The price of oil continues to decline
Monday, March 15, 2021 8:06 PM
(ABM FN-Dow Jones) Oil prices fell again on Monday after Brent prices failed to stabilize above $ 70 last week, despite strong demand from China. At a settlement of $ 65.39, a WTI barrel was 0.3 percent cheaper. Last week, the price of WTI has already lost 0.7 percent.
According to Schneider Electric analyst Robbie Fraser, investors continue to question whether a strong start to the year will really herald long-term prices.
“The global introduction of vaccines continues to play an important role in increasing oil demand, with some positive macroeconomic data from China offsetting the disappointing developments in India,” Fraser said.
The Chinese economy rebounded sharply in January and February, as shown, among other things, by the Chinese industry numbers.
The current oil price, according to Fraser, reflects concerns about the supply side of the market, pointing to OPEC + which is still producing millions of barrels of oil per day less than usual. “Investors are aware that the rise in the price of oil is mainly a result of OPEC + production cuts and that these measures are temporary,” said Manish Raj, an analyst at Velandera Energy.
According to Fraser of Schneider Electric, current price levels have often led to massive increases in shale oil from the United States in the past. “But there are indications that this time producers are a little more cautious as they focus on cash flow and try to reduce debt,” Fraser said. “This will benefit the OPEC + strategy, provided everyone is on the same page.”
According to market analyst Troy Vincent of data provider DTN, the recent drop in oil prices is a continuation of the correction that began after Brent and WTI prices tested “massive” technical resistance levels early last week after news of the attacks on Saudi oil platforms.
“As in 2019 and early 2020, oil prices have failed to breach important resistance levels,” Vincent said. “So there appears to be a healthy correction.”
Raj van Velandera Energy predicts that movements in the oil market in the coming period will be mainly determined by compliance with OPEC + agreements and a recovery in oil demand. And earlier last week, OPEC said that demand is expected to grow slightly stronger this year than it was a month ago.
ABM Financial News; [email protected]; Revised text: +31 (0) 20 26 28999.