WTI Analysis 16-Mar-21
Mass vaccination of the population, which is expected by oil-producing countries, waiting for the demand for fuel for travel and air travel, was hit in Europe, which provides a fifth of the global demand for oil. For four months, oil has risen by almost 100%, but on the approaches to the 68 mark, the rally has exhausted its potential. Hedge funds, massively betting on growth, begin to close positions, fixing profits. In addition, the market is under pressure from rising US bond yields, which leads to a decrease in risk sentiment and a strengthening of the US dollar.
According to the report of the Energy Information Administration of the Ministry of Energy, the decline in shale oil production in the United States in April compared to March will be 46,000 barrels per day. At the same time, the actual production of shale oil in March was at the level of the values expected by the agency in the previous forecast – about 7.5 million barrels per day. Bank of America has revised the forecast for the price of Brent crude oil in 2022 from 55 to 60 dollars per barrel against the background of the expected growth in demand. The bank recalled that in early March, the OPEC+ countries made an unexpected decision on oil production for April 2021. Despite the fact that the initial agreements allowed to increase production by 1.5 million barrels per day, it was decided to maintain the current level of production. An exception is made for Russia and Kazakhstan, which can increase production by 150,000 barrels per day. At the same time, Saudi Arabia will continue to voluntarily reduce production by one million barrels.