Demand Concerns Are Pressuring Oil Prices
September 14, 2020
Crude prices are under some selling pressure here in early morning trading as reports are positive that crude oil production out of Libya is trying to reestablish itself. Commander Khalifa Haftar said is committed to ending months-long blockade of oil facilities. He wants to get all port open. This has been a very fluid situation with good news one day and bad the next. The US has been trying to help in these efforts more recently as part of a bigger peace effort. If their production can some back, then this will certainly be something the OPEC+ will take a look at when the meet again.
The Baker Hughes report said the US energy firms cut the number of oil and natural gas rigs for the first time in four weeks. Oil and gas rigs were down by two to 254. The number of oil rigs fell by 1 to 180, while the number of natural gas rigs fell by 1 to 71.
Demand concerns are still a big factor that is pressuring crude prices. OPEC+ released their report on oil demand and they are estimating it will be down 9.46 million barrels per day from 2020 from where it was in 2019. That was more then they previously expected. It does see demand up next year by 6.62 million bpd, but that is 370,000 bpd less than its last estimates. OPEC turns 60 years old today. OPEC’s monitoring committee meets this Thursday.
There is a lot of activity in the tropics that will have to we watched in the coming days and weeks. Tropical Storm Sally is the current one and is most likely to turn into a hurricane before making landfall. Gulf of Mexico production could be impacted by these disturbances.