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Crude prices rebound, one year after their historic drop

A year ago, oil prices plunged into the abyss, weighed down by the pandemic and divisions in OPEC +, but have since surfaced and have progressed driven by vaccines and expectations of recovery.

At about $ 65 a barrel, oil recovered its pre-pandemic price and the US bank Goldman Sachs estimates that it will exceed $ 80 this summer due to “favorable indicators of demand in areas with high vaccination rates.”

Its rival Morgan Stanley estimates that a barrel of crude will reach 70 dollars in the third quarter.

“As the summer months approach, it is reasonable to expect that the ‘reopening’ effect [de la economía] it adds to the normal seasonal increase “in black gold consumption, according to its analysts.

In addition, the fundamentals of the oil market – supply and demand – are now “more solid” and balanced, estimates the International Energy Agency (IEA) in its latest forecasts published last week.

The Organization of the Petroleum Exporting Countries (OPEC) was also more optimistic and expects a global rebound in demand for crude oil from 6 million barrels a day to 96.5 million.

However, a year ago, the reference price of crude in the United States was in negative territory, something never seen before.

The US benchmark fell to -40.32 dollars a barrel on April 20 and remained below the zero dollar threshold for another day.

Investors, caught between the absence of buyers and the inability to buy more barrels due to lack of available space, were forced to pay to dispose of them.

“The situation has changed a lot since then,” especially after the arrival of several vaccines against covid-19 that fueled the hope of turning the page on the pandemic, Ipek Ozkardeskaya of Swissquote Bank told AFP.

The vaccination campaign in the United Kingdom is in full swing, as well as in the United States, where its president, Joe Biden, unveiled a gigantic recovery plan for the world’s No. 1 economy and No. 1 consumer of crude.

The International Monetary Fund (IMF) now projects 6% global growth in 2021 following the historic 2020 recession.

– An overconfident market –

“The feeling that everything is going well has made the market overconfident to face a new crisis,” warns Bjornar Tonhaugen, an analyst at Rystad, in a note published on Tuesday.

A situation similar to that of last April “may occur,” says Bjarne Schieldrop, an analyst at SEB.

The pandemic joined the dispute between Russia and Saudi Arabia on March 6, 2020 during the last OPEC + ministerial meeting, which brings together the 13 OPEC countries and 10 allied nations, he recalls.

The world’s second and third largest oil producers, respectively, were plunged into a short and intense price war.

Since then, the alliance of oil-producing countries has resumed the path of the agreement and drastically cut its production to adapt supply to low demand. Now, slowly reopen the black gold tap.

The next meeting of ministers from oil-producing countries is scheduled for Wednesday, although OPEC + decided to bring forward a meeting of the monitoring committee of the agreement on the reduction of production to this Tuesday.

OPEC Secretary General Mohammed Barkindo said Monday after a technical meeting that the “world economy continues to show positive signs of recovery”, although he warned of “uncertainty about the future.”

The next turning point for producers could be the energy transition, which should “fundamentally change the market by 2050” by an increase in renewables, warns Tonhaugen.

bp / ved / sr / tjc / zm

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