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Rystad Energy comments as oil prices fall again

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Oilfield Technology,

As enthusiasm subsided and prices fell again, Rystad's Energy Head of Oil Markets, Bjornar Tonhaugen, has made the following comments:

"This morning’s rise in oil prices was not justified. At least by fundamentals. The market traded on enthusiasm that more cuts may be coming and that some OPEC+ producers may start cutting output early, but in absence of any new production-cutting promises it quickly looked back at facts.

And facts clearly show that there is very low economic activity in the Eurozone, as per the latest indicators, and that no more nations seem to step up with generous production cuts. Expectations for tensions in the Middle East once again proved to be one or two-days hype and things also got calmer again.

What’s not going calmer? The rate in which global storage is filling up with oil.

The storage problem is there and the market knows it and as a result nobody wants to keep strong oil portfolios before the weekend. In the world we live in now, two days can again be too heavy on developments before the market reopens on Monday, and traders can afford limited risk in current price levels."

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