The outlook for U.S. shale oil is slightly more “optimistic” due to rising prices and output will recover further in the second half of 2021, OPEC said on Jan.14, in a sign its policy of cutting output is helping rivals pump more.
U.S. shale producers that are hedging are likely locking in about 15% to 20% of production at a time, said Tom Petrie, chairman at energy investment bank Petrie Partners.
Pace and response to vaccines add uncertainty to planning, says agency analyst.
Both crude oil benchmarks are trading at the highest since February 2020, before the coronavirus outbreak in China began spreading across the world and billions of people went into lockdown.
The U.S. political arena and the management of the oil markets are poised for interaction, and the resulting dynamics could trigger market volatility that will surpass even that seen last year, Stratas Advisors says in its latest oil price forecast.
Barclays notes that the COVID-19 situation puts the oil market in ‘uncharted territory.’
Oil producers and refiners adjusted to the situation at an exceptionally fast pace.
The 13-member OPEC group pumped 25.59 million bbl/d of oil in December, the survey found, up 280,000 bbl/d from November and a further increase from a three-decade low reached in June.
WTI futures in the U.S. climbed as much as 0.6% to $50.24/bbl, also the highest since Feb. 26, before slipping to $49.96. The contract on Jan. 5 closed up 4.6%.