The shortage on the market will support oil prices
World prices were adjusted after some overheating in the market. Despite the significant drop, analysts estimate the supply and demand in the market within the previous range. The agency Fitch assumes that the deficit in the market will support prices, and does not expect a strong collapse in the second quarter of 2020. Fitch assumes that the average annual price of Brent crude oil this year will be $ 58 per barrel. The return of prices to the range of 50-60 dollars per barrel is possible, especially in the second half of the year, when OPEC+ may begin to increase production.
In seven months, the yield on 10-year US securities has almost tripled amid accelerating inflation and the Fed's reluctance to increase asset purchases. This leads to a decrease in risk sentiment and a strengthening of the dollar. Hedge funds have accumulated a record volume of bets on the growth of commodities, and now they are starting to take profits. To justify current prices, the market needs a sustained recovery in fuel demand. OPEC expects that the world will need 5.6 million barrels of additional supplies due to the resumption of air traffic and travel. But Europe is still facing a lost summer tourist season, and this could deal a major blow to the economies of Italy, Spain, Portugal and Greece, as well as fuel demand.