Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
Vladimir Zernov
WTI Crude Oil

Oil Video 08.10.20.


Strike In Norway Pushes Oil Closer To The $41 Level

Oil is on the move today amid risks that Norway’s Johan Sverdrup oilfield may be shut down due to strike.

We have already discussed the strike in Norway at the beginning of this week. At that time, the strike was projected to cut the country’s oil production capacity by about 330,000 barrels of oil equivalent per day (boepd).

Johan Sverdrup can produce about 470,000 barrels of oil per day (bpd). In addition, other oilfields may also be affected by the strike, and the current estimate of the potential production shutdown is 966,000 boepd.

This is a significant quantity for the oil market so it’s not surprising that oil is trying to settle above the $41 level. In addition, U.S. domestic oil production will take a temporary hit due to Hurricane Delta which forced the evacuation of offshore platforms.

The recent EIA Weekly Petroleum Status Report indicated that U.S. oil production increased from 10.7 million bpd to 11 million bpd but it will reverse course due to the impact of the hurricane.

A combination of a strike in Norway and hurricane-related shutdowns in the U.S. create a good setup for a decline in inventory levels in the upcoming weeks.

OPEC Believes That Oil Demand Will Grow To 109.1 Million Bpd By 2045

OPEC has just released its 2020 World Oil Outlook in which it shared its view on the trajectory of oil demand recovery.

According to OPEC, oil demand will continue to recover and reach the level of 103.7 million bpd by 2025. This growth will be driven by demand from non-OECD (Organisation for Economic Co-operation and Development) countries, while demand from the developed world will decline by 1.1 million bpd between 2019 and 2025.

Interestingly, OPEC believes that world oil demand will increase by 9.4 million bpd compared to 2019 levels and reach 109.1 million bpd by 2045 despite the fact that demand from OECD countries would be lower by 13 million bpd by that time.

OPEC believes that the increase in global oil demand will be driven by the petrochemicals sector, aviation and road transportation. Put simply, OPEC does not think that electric vehicles will make their way to the developing countries by 2045.

In short, OPEC presented the most bullish outlook among those that we have seen during the current crisis. It remains to be seen whether the general market mood will improve because OPEC is not bearish on oil unlike other major oil producers, but OPEC’s view is certainly a breath of fresh air for long-term oil bulls who are tired of looking at gloomy predictions.

For a look at all of today’s economic events, check out our economic calendar.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.