Saxo Bank expects a recovery in oil prices in 2021
Saxo Bank, a specialist in multi-asset trading and investment solutions, expected that the recovery of oil prices will be delayed until next year 2021 due to the delay in the availability of a vaccine for the emerging corona virus (Covid 19), stressing that the pressures in oil prices put expectations that the price of a barrel will not recover above $ 50 a barrel Before the end of the year.
There are several factors that keep the price of oil below $ 50 a barrel until 2021, the head of the commodity strategy at Saxo Bank, Oli Hansen, said during an Internet press briefing, including the faltering global demand for oil due to travel restrictions imposed by the pandemic (Covid- 19), the rapid increase in oil stocks in storage facilities, and the reduction of the price of Saudi Arabia's oil exports.
Hansen said: “Crude oil prices have been relatively stable at around $ 40 since June, but there are indications in actual market data of emerging risks, as weak oil refining profit margins, mainly resulting from increased diesel and junk fuel. Will cause the storage facilities to fill up very quickly. "
At the same time, the Kingdom of Saudi Arabia reduced the official sales prices of its exports to Asia, which reinforced the belief that the recovery in global demand has faltered in a new increase in the number of people infected with Covid-19 disease in various parts of the world.
Hansen said that new sales of crude oil are not expected, but we have to accept the fact that the Covid-19 pandemic and concern about the lack of a vaccine may delay the price recovery to $ 50 and more until next year.
Hansen added, "The slowdown in the oil price recovery will pose challenges to OPEC Plus member states, which raised their production ceiling before the recovery in demand enough to absorb this additional production. The long-term impact of lower oil prices and the negative impact of the Covid-19 pandemic on global tourism. Challenges to the economies of the Gulf countries.
Hansen expects that the problem of global energy demand will remain on the agenda of the region's governments for a while, due to the lack of clear expectations for the energy sector even with the creation of a vaccine that puts an end to the pandemic.
Hansen added, "There is a great possibility that the pandemic will change our lifestyle and work in the future, which will negatively affect future fuel consumption. He expressed his belief that the new reality will mean reducing the number of local and international business meetings, increasing the number of home workers, and adopting bicycles as a means." For transportation, spending vacations locally instead of traveling abroad, and preferring local services and goods .. These factors will have a major impact on demand in the energy sector.
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