Oil Tests The $41 Level As Norway’s Johan Sverdrup May Get Shut Down Due To Strike
Oil video 10/08/20.
Strike in Norway brings oil closer to $ 41
Oil is on the move today as there is a risk that Norway's Johan Sverdrup oil field will close due to a strike.
We discussed the strike in Norway earlier this week. At that point, the strike was expected to reduce the country's oil production capacity by around 330,000 barrels of oil equivalent per day (boepd).
Johan Sverdrup can produce around 470,000 barrels of oil (bpd) per day. In addition, other oil fields may also be affected by the strike and the current estimate of the potential shutdown is 966,000 boepd.
This is a significant amount for the oil market, so it's not surprising that oil is trying to establish itself above the $ 41 level. In addition, US domestic oil production will be temporarily impacted due to Hurricane Delta, which forced evacuation of offshore platforms.
The latest EIA Weekly Petroleum Status Report found that US oil production increased from 10.7 million bpd to 11 million bpd but will be reversed due to the effects of the hurricane.
A combination of a strike in Norway and hurricane standstills in the US creates a good basis for inventory decline in the coming weeks.
OPEC expects oil demand to rise to 109.1 million bpd by 2045
OPEC just released its World Oil Outlook 2020 in which it shared its view on how the recovery in oil demand is progressing.
According to OPEC, oil demand will continue to recover by 2025 and reach the level of 103.7 million bpd. This growth will be driven by demand from non-OECD (Organization for Economic Cooperation and Development) countries and demand from industrialized countries will decrease by 1.1 million bpd between 2019 and 2025.
Interestingly, OPEC expects global oil demand to rise 9.4 million bpd compared to 2019 and reach 109.1 million bpd by 2024, although demand from OECD countries rose by 13 million bpd at that time. bpd would go down.
OPEC assumes that the increase in global oil demand will be driven by the petrochemical, aviation and road transport sectors. Put simply, OPEC doesn't believe electric vehicles will hit developing countries by 2045.
In short, OPEC presented the most optimistic outlook among those we have seen during the current crisis. It remains to be seen whether general market sentiment will improve as OPEC, unlike other major oil producers, is not bearish on oil, but OPEC's view is certainly a breath of fresh air for long-term oil bulls tired of dire predictions consider.
In our economic calendar you will find all economic events of today.
This article was originally published on FX Empire
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