Struggling oil market finally stabilized but recovery will take up to 3 months – JP Morgan

Must Read

Guyana remains confident in ICJ, committed to international law – President Ali tells UN General Assembly

In his inaugural address to the United Nations General Assembly on Wednesday, September 23, Guyana’s President, Dr....

Iranian super tanker ‘horse’ set to violate U.S. sanctions again by shipping Venezuela crude

(Bloomberg) --After defying U.S. sanctions by shipping a cargo of oil condensate to Venezuela just last week,...

“Female-owned’ maritime institute prepping hundreds of Guyanese for deepwater operations

MatPal Marine Institute, the only maritime institution in Guyana, is equipping hundreds of Guyanese with internationally recognized...
OilNOW
OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

Global oil demand remains at historic lows as inventory vastly outpaces storage, but JPMorgan analysts think the worst of the commodity-market carnage is over, according to a report from Markets Insider.

The coronavirus pandemic and the ignition of a price war helped push oil futures below $0 for the first time on April 20. Producers worked to curb supply and lift prices, and after weeks of emergency action, inventories are finally turning toward recovery.

Markets Insider said the bank’s analysts expect demand to bounce back over the next two to three months and shift oil surpluses to deficits in the second half of the year.

“While there is still a massive glut of oil that will need to be cleared before there can be any meaningful recovery in prices, we believe that the global oil market is tentatively entering an inflection phase, where rebalancing has started,” the team led by Joyce Chang wrote Thursday.

Oil’s recent price moves lend credence to the analysts’ thesis. West Texas Intermediate crude has more than doubled from its late-April lows, and Brent crude has enjoyed a moderate rally in recent sessions.

Even if the oil market turns for the better, the coronavirus’ fallout will create lasting scars, JPMorgan said. Demand won’t reach pre-outbreak levels until November 2021, and the risk to own oil and gas assets “has likely been permanently elevated” due to greater uncertainty around supply and demand dynamics.

JPMorgan recommends defensive oil stocks for the near-term as months of market rebalancing is poised to fuel strong volatility. Natural gas has emerged as the bank’s “obvious winner,” while oil exploration and production businesses are “largely uninvestable” until oil prices match the cost of shale discovery.

WTI crude traded as much as 11% higher on Thursday to $26.74 per barrel. Brent crude jumped as much as 7% to $31.84 per barrel.

According to the Markets Insider report, both contracts will trade at roughly $34 per barrel by the end of 2020, the analysts projected, before Brent crude climbs to $37 per barrel the following year.

- Advertisement -

Latest News

Guyana remains confident in ICJ, committed to international law – President Ali tells UN General Assembly

In his inaugural address to the United Nations General Assembly on Wednesday, September 23, Guyana’s President, Dr....

Iranian super tanker ‘horse’ set to violate U.S. sanctions again by shipping Venezuela crude

(Bloomberg) --After defying U.S. sanctions by shipping a cargo of oil condensate to Venezuela just last week, Iran is using the same...

Bidders line up for ExxonMobil’s UK North Sea oil and gas fields

(Bloomberg) -Exxon Mobil’s UK North Sea assets have attracted suitors from state-owned companies to private equity-backed firms as the U.S. oil giant...

“Female-owned’ maritime institute prepping hundreds of Guyanese for deepwater operations

MatPal Marine Institute, the only maritime institution in Guyana, is equipping hundreds of Guyanese with internationally recognized and accredited certifications for employment...

BHP projects, amendment to Petroleum Tax can be game changers for T&T – Energy Chamber

While oil production in Trinidad and Tobago has been on the decline since the 1980’s, two current events could potentially change the...

More Articles Like This