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 4:19 p.m. EDT, WTI crude was still up 1.32% on the day, to $ 56.97. Brent continued to rise more than 1% on the day, with $ 59.44, roughly dangerously close to the $ 60 psychological threshold for the benchmark.
Last week, at this point, Brent’s spot price was just $ 55.04. The gain of about $ 5 is due to a combination of factors, including a sharp decline in crude inventory in the United States, the containment of OPEC + production, the rise in Arco crude prices for in Europe, drunken American traders of stimulus talks and the murmurs of a general hardening. oil market.
These are bullish signs in fact. But can this upward trend last amid the blockade extensions and demand for oil that does not yet exist?
When a stimulus deal is finalized, oil prices are expected to rise, it is certainly still bullish. But from a bearish point of view, oil demand is still lagging behind and some analysts are not calling for a full rise in demand for years, if ever.
The EIA, on the other hand, does not see U.S. energy consumption recovering completely for another eight years. Undoubtedly, this is negative.
Will OPEC be able to curb the flood of supply until then? Can they afford not to? Russia continues to sting to increase its oil production, with the intention of opening its doors to American slate producers. For now, Saudi Arabia is happy to take one for the team, who has given up on halting production, so other people in the group will continue with at least some of the cuts. For now, OPEC shares are bullish.
The EIA sees U.S. oil production setting new records, but not until 2023.
Goldman Sachs, however, remains bullish, asking for $ 65 Brent in the middle of the year, with WTI down $ 60.
Rystad Energy, however, sees a price correction on the horizon.
“A lot of technical indicators are flashing red, so a price correction wouldn’t be surprising soon,” Rystad said Friday, according to Oilfield Technology.
By Julianne Geiger for Oilprice.com
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