Brazilian state-owned petroleum company Petrobras exported 1 million barrels of oil per day in April, representing a new oil export record, despite low oil demand caused by the COVID-19 pandemic.
For the first time in history, US crude oil prices collapsed below $0, as a result of COVID-19 disruptions that brought a supply gut. Monday ended at a stunning minus $37.63 a barrel, as desperate traders paid to get rid of oil.
With global markets experiencing the oil price crash, Wood Mackenzie’s Tom Ellacott believes that the price collapse could lead to a new phase of deep industry restructuring, bringing similar changes as those of the late-1990s.
The Tanker Research & Consulting department at Poten & Partners recently informed on the potential impact of the Coronavirus outbreak on the tanker market. In fact, Poten & Partners highlight that it is highly uncertain at this point how the virus outbreak, which started in the city of Wuhan in China and has spread across several countries in Asia and the world, will further develop and what the implications will be on the Chinese as well as the global economy.
Reuters reports that oil prices hit high on Friday, January 17, but were little changed during the week as the sluggish economic growth in the world’s biggest crude importer, China, raised concerns over fuel demand and countered optimism from the signing of the China-U.S. trade deal.
Oil prices dropped an almost 1% on Wednesday, following a surprise build in the U.S. crude inventories led by a concern within the trading and analytical communities that a new round of tariffs on Chinese goods might be imposed in the following days.
Freight rates to ship US crude to Asia are still on the rise, with costs to charter a supertanker increasing to a record $12 million on October the 3rd. This development comes as an aftermath of US’s sanction against two units of COSCO, alleging that they were involved in transporting crude out of Iran.
The recent oil price jump could lead to further momentum for service sector margins, according to Rystad Energy. Namely, 60% of the top 50 oilfield service (OFS) contractors already improved margins and increased operational efficiency in the first half of 2019.
Oil prices increased as tensions remain high between Iran and the US. What is more, the US Secretary of State Mike Pompeo talked about significant sanctions against Iran, which could be announced soon. Brent futures were up 25 cents, an increase of 0.4%, reaching $65.45 a barrel. In addition, West Texas Intermediate crude was up 37 cents, or 0.6%, at $57.80 a barrel.
The US Secretary of State Mike Pompeo announced on April 22 that the United States will end all exceptions for countries currently purchasing oil from Iran. As he specifically, said the country will no longer grant any exceptions. ‘We’re going to zero across the board’. Countries that had previously bought Iran’s crude oil have been transitioning to new suppliers.
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