Crude News
Oil prices rebounded on Tuesday, supported by robust economic data from China that offset returning supply in other regions but gains were capped by forecasts for a slow recovery in global oil demand as coronavirus cases continue to rise.
The International Energy Agency (IEA) - which advises Western governments on energy policy - said in its World Energy Outlook that in its central scenario a vaccine and therapeutics could mean the global economy rebounds in 2021 and energy demand recovers by 2023.
But under a "delayed recovery scenario," it said the energy demand recovery is pushed back as far as 2025.
The Organization of the Petroleum Exporting Countries (OPEC) also forecasts a slower demand recovery outlook.
In one report, it suggested that oil demand will rise by 6.54 million bpd next year to 96.84 million bpd, which remains 80,000 bpd less than expected a month ago.
Social restrictions were being tightened in Britain and the Czech Republic to battle rising cases of COVID-19, and French Prime Minister Jean Castex said he could not rule out local lockdowns as an option to control the spread of COVID-19 as well.
On the supply side, workers have been returning to U.S. Gulf of Mexico platforms after Hurricane Delta and Norwegian workers to offshore rigs after ending a strike.
The energy minister from the United Arab Emirates (UAE) said on Tuesday that OPEC+ oil producers will stick to their plans to taper oil production cuts from January.
OPEC member Libya on Sunday also lifted force majeure at its Sharara oilfield.
Libya's total output on Monday was expected to hit 355,000 bpd while a full return of the 300,000 bpd Sharara field would nearly double that.
For prices to rise further, I think elevated spare production capacity among OPEC+ needs to be reduced. This is why I continue to describe the oil market as artificially, and not structurally, tight at present.
Weekly U.S. oil inventory data is delayed a day due to Monday's Columbus Day federal holiday.
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