The first glimmer of hope in oil industry

The first glimmer of hope in oil industry

Observing news today one can easily get disappointed. All see significant surpluses in global oil markets throughout 2020. This is partly due to increased production in Saudi Arabia and Russia, two of the world’s top three oil producers, and, perhaps more significantly, to Covid-19 destroying demand.

However, things are getting better.

Firstly, due to the upcoming US deal on a $2 trillion coronavirus aid package, the economic impact of the outbreak will be blunted. As a result, it will support oil demand.

Secondly, the U.S. signaled the possibility of a joint U.S.-Saudi Arabia alliance to stabilize prices.

We already can see the outcome: oil prices rose on Tuesday. Oil still matters enormously to the global economy. That is unlikely to change for the next decade and beyond, despite mounting concerns over fossil fuels and climate change and increasing talk of a post-carbon future.

Every day, the world consumes about 97 million barrels of oil. By the year 2030, according to the International Energy Agency, the world is likely to hit a daily consumption of 105 million barrels of oil. Even if this growth in demand flattens out in the 2030s, as is widely forecast, oil will continue to play a key role in our global economy into the 2040s.

In the end, oil markets will probably stabilize, because they always do. The coronavirus will be brought under control and demand for oil will climb again.

All of this should be good (long-term) news for Middle East, Russian and US oil producers, though it may be difficult to see that silver lining amid today’s dark clouds. The oil market quietly moves on, gyrating wildly at times, but still fueling our modern economy – at least for another couple of decades.

At the monet of writing, Brent managed to return above $27 a barrel, while WTI traded above $22 a barrel.

oil

Similar

Latest news

USD strengthened as optimism waned
USD strengthened as optimism waned

The market optimism waned amid stricter restrictions to control rising coronavirus infections. S&P 500 and Nasdaq dropped from the all-time highs, while the USD jumped higher.

Stocks up, USD down
Stocks up, USD down

S&P 500 skyrocketed to the all-time high on optimism that Biden’s fiscal stimulus will support economic growth and boost corporate earnings.

Deposit with your local payment systems

Learn more

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

Manager will call your number

Correct number

Your request is accepted

Manager will call your number

Next callback request for this phone number
will be available in {time}

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera