Oil saw its biggest overnight rise in New York on Thursday. The WTI, the American benchmark, recorded an increase of 24.99%, the strongest since the start of trading in 1983. The barrel of oil, which had fallen to 20 dollars, traded yesterday at the end of the day at 25 , 46 dollars.
Is this the end of the fall in crude prices? Several signs let him think.
Since the start of the year, prices have fallen by almost 60%. In recent days, oil prices have been weighed down by the combined effect of the coronavirus crisis, which is undermining demand, and the price war between Saudi Arabia and Russia.
But the market could start to see a brightening.
First there were Donald Trump’s statements on Thursday. The American president said he wanted to find ” common ground In the price war. ” It’s very devastating for Russia, because the whole economy is based on oil, and they face the lowest price in decades.s, “he said, adding:” I would say it’s very bad for Saudi Arabia as well. But they fight, they fight over price, they fight over production. When the time is right I will get involved. »
As for Saudi Arabia and Russia, partners since 2016 via the Opep + agreement, which have been waging a fratricidal price war for two weeks, announcing that they want to flood a crude market whose supply was already in excess and which is suffering from full force. whipping up a drop in demand under the effect of drastic measures to stem the novel coronavirus pandemic, they could soon bury the hatchet.
The situation ” should not last too long ”, said Thursday Carlo Alberto De Casa, commodities analyst (editor’s note) at ActivTrades, ” because for Russia and Saudi Arabia, this oil war is detrimental and must be resolved ”.
The vice-president of Lukoïl, Leonid Fedun, moreover declared the same day to the television channel of the Russian daily newspaper RBK that the two countries had to resume negotiations to stabilize the situation on the oil market. According to him, a barrel at 25 dollars is worse than a ” nightmare “ for Russian oil companies.
Finally, with regard to global demand, it should also soon start to rise again. After three months of confinement, China, which consumes no less than 10% of global crude demand (nearly 14 million barrels / day) is on the way to defeating the Covid-19 epidemic. Its factories are gradually reopening.
Good news for producing countries, including Gabon and its 200,000 barrels extracted every day from its subsoil.