Although Baker Hughes reported an increase in the number of active drilling rigs in the United States on Friday, oil prices continued to rise on Friday afternoon.
At 16:19 EDT, WTI crude was still 1.32% higher on the day at $ 56.97. Brent continued to rise more than 1% on the day, at $ 59.44 – dangerously close to the $ 60 psychological threshold for the benchmark.
Last week at this point, the spot price for Brent was just $ 55.04. The nearly $ 5 profit is due to a combination of factors, including a large decline in crude oil in the United States, continued production control of OPEC +, the price increase of Aramco to crude oil for Europe, American traders drunk of stimulation talks, and whispering of an overall intensification oil market.
These are indeed bullish signals. But can this rising trend last in the midst of exclusion and the demand for oil that is just not there yet?
When a stimulus deal is finalized, oil prices are expected to be boosted – it is certainly still strong. But on the downside, demand for oil is still lagging behind, and some analysts have not been asking for a full setback for years.
The EIA, for one, sees that U.S. energy consumption should not bounce back completely for another eight years. It’s definitely on the clumsy side.
Will OPEC be able to halt the flood supply up to that point? Can they afford not to do it? Russia is still itching to boost its oil production, and wants to open the door to US shale producers. For now, Saudi Arabia would like to take one for the team, thanking them for curbing production so that others in the group will continue with at least some of the cuts. At the moment, OPEC’s actions are clumsy.
The EIA sees US oil production setting new records, but only in 2023.
However, Goldman Sachs remains strong, asking Brent at $ 65 by the middle of the year, with WTI in the low $ 60s.
However, Rystad Energy sees a price correction on the horizon.
“A lot of technical indicators are flashing red, so a price correction soon will not be surprising,” Rystad told Oilfield Technology on Friday.
By Julianne Geiger for Oilprice.com
More lectures from Oilprice.com: