10.09.2020
Market commentary on heating oil 10.09.2020
And still, one topic dominates the situation on global trading floors: COVID. Current economic data and growth forecasts reflect a continuous back-and-forth between hope and concern — along with the realization that a return to normalcy is still a long way off.
After the weekly U.S. inventory figures came in clearly bearish, the ongoing downward trend intensified. Adding to this, the U.S. Energy Information Administration (EIA) significantly revised its demand forecast downward. No surprise, considering the recent surge in new infections in both the U.S. and India; meanwhile, there were reports from China indicating a slowdown in economic momentum in the Middle Kingdom. The future price trend will also heavily depend on the behavior of the oil production consortium OPEC+ (OPEC plus Russia). Mid-year, the group had slightly eased production restrictions in the hope of a swift economic recovery. Countries like Iraq used this relaxation to slightly replenish their strained state budgets. Given the now significantly weaker price levels, it is quite possible that the producers’ alliance is considering a realignment of its production policy.