ANL 12.55 Decreased By ▼ -0.59 (-4.49%)
ASC 12.21 Decreased By ▼ -0.09 (-0.73%)
ASL 13.28 Decreased By ▼ -0.16 (-1.19%)
BOP 8.55 Increased By ▲ 0.14 (1.66%)
BYCO 5.90 Decreased By ▼ -0.10 (-1.67%)
FCCL 17.52 Decreased By ▼ -0.33 (-1.85%)
FFBL 23.80 Decreased By ▼ -0.31 (-1.29%)
FFL 10.01 Decreased By ▼ -0.14 (-1.38%)
FNEL 9.23 Decreased By ▼ -0.29 (-3.05%)
GGGL 14.74 Increased By ▲ 0.64 (4.54%)
GGL 26.36 Increased By ▲ 0.20 (0.76%)
HUMNL 5.85 Increased By ▲ 0.11 (1.92%)
JSCL 15.00 No Change ▼ 0.00 (0%)
KAPCO 31.40 Increased By ▲ 0.15 (0.48%)
KEL 3.32 Decreased By ▼ -0.05 (-1.48%)
MDTL 2.08 Decreased By ▼ -0.02 (-0.95%)
MLCF 32.44 Decreased By ▼ -1.16 (-3.45%)
NETSOL 94.68 Increased By ▲ 3.73 (4.1%)
PACE 4.05 Decreased By ▼ -0.10 (-2.41%)
PAEL 21.00 Increased By ▲ 0.30 (1.45%)
PIBTL 7.35 Decreased By ▼ -0.05 (-0.68%)
POWER 6.25 Decreased By ▼ -0.19 (-2.95%)
PRL 12.29 Increased By ▲ 0.13 (1.07%)
PTC 8.62 Decreased By ▼ -0.06 (-0.69%)
SILK 1.19 No Change ▼ 0.00 (0%)
SNGP 37.84 Increased By ▲ 0.04 (0.11%)
TELE 15.55 Increased By ▲ 1.20 (8.36%)
TRG 93.71 Increased By ▲ 6.53 (7.49%)
UNITY 22.98 Increased By ▲ 1.02 (4.64%)
WTL 2.07 Increased By ▲ 0.04 (1.97%)
BR100 4,487 Increased By ▲ 14.3 (0.32%)
BR30 17,781 Increased By ▲ 186.4 (1.06%)
KSE100 43,847 Decreased By ▼ -6.6 (-0.02%)
KSE30 17,049 Increased By ▲ 43.7 (0.26%)

Coronavirus
LOW
Source: covid.gov.pk
Pakistan Deaths
28,793
924hr
Pakistan Cases
1,287,703
31024hr
Sindh
477,119
Punjab
443,610
Balochistan
33,514
Islamabad
107,989
KPK
180,471
Markets

Saudi cut to boost oil market de-stocking, even as demand falters

  • It expects the oil market to be in deficit for the remainder of the year, peaking at 2.3 million bpd in September, or nearly 3% of global oil supplies for that month.
10 Jan 2021

LONDON: Saudi Arabia's voluntary oil production cut is expected to bring the oil market into deficit for most of 2021 even as new lockdowns to contain the spread of the coronavirus batter oil demand, analysts say.

Saudi Arabia, the world's biggest oil exporter, surprised the market on Jan. 5 with a voluntary output cuts of 1 million barrels per day (bpd) in February and March.

The move came as the Organization of the Petroleum Exporting Countries and allies - a group known as OPEC+ - agreed most producers would hold output steady in February and March, while allowing Russia and Kazakhstan to raise output by a modest amount.

With coronavirus infections spreading rapidly, producers are wary of a new blows to oil demand which could lead to rising inventories.

"We remain in uncharted territory as the COVID-19 situation continues to evolve, but [OPEC+] has so far succeeded in both putting a floor below prices and reducing volatility, which should encourage further cooperation," Barclays said.

News of the cut boosted oil prices to an 11-month high, with backwardation, when prompt prices trade at a premium to future prices, widened, which could encourage traders to take oil out of storage.

In its most recent research, Goldman Sachs revised down its demand forecasts for January, February and March by 1-2 million bpd each month.

Still, and largely as a result of the Saudi cut, the bank sees a small deficit in February, a revision from an implied build of 0.6 million bpd previously.

It expects the oil market to be in deficit for the remainder of the year, peaking at 2.3 million bpd in September, or nearly 3% of global oil supplies for that month.

Consultancy Rystad Energy sees an even bigger deficit.

"In the most optimistic case which includes full OPEC+ compliance and the voluntary Saudi cut, we see crude stocks decreasing by 1.3 million bpd for February, and 0.8 million bpd for March," Rystad head of oil market research Bjornar Tonhaugen said.

We love hearing your feedback, please help us improve by answering these few survey questions

Comments

Comments are closed.