If you trade crude oil futures, you definitely remember that time - not long ago - when price for oil futures went into negative territory. Well, I think you understand that we are facing a similar situation.
To make matters crazier, Libya started producing oil again. The country threw a spanner into the works as OPEC countries are trying to lower production to keep the price as it is. Russia and Saudi Arabia are in consensus that production should be lowered but Libya doesn't want to hear none of that.
This has boosted the prospects of continuing normality for Libya's - an OPEC member - oil production but raises questions about oil prices, which are already facing oversupply and anemic demand due to rising coronavirus cases globally and uncertainty ahead of a potentially deadlier winter.
"The immediate catalyst for lower prices appears to be market expectation that Libya's production is going to recover back to pre-civil war levels of more than 1m barrels per day in the next few weeks," wrote Edward Bell, senior director of market economics at Dubai-based bank Emirates NBD.
A relentless second wave of coronavirus cases across Europe and the U.S. has stopped oil demand recovery in its tracks, but the fresh prospect of increased supply is further raising the stakes for OPEC+, analysts at ANZ bank said.
Therefore, can we expect negative pricing as the Northern hemisphere heads into winter? Well, we'll have to wait and see. In the short-term, $36.6 is my target.
To make matters crazier, Libya started producing oil again. The country threw a spanner into the works as OPEC countries are trying to lower production to keep the price as it is. Russia and Saudi Arabia are in consensus that production should be lowered but Libya doesn't want to hear none of that.
This has boosted the prospects of continuing normality for Libya's - an OPEC member - oil production but raises questions about oil prices, which are already facing oversupply and anemic demand due to rising coronavirus cases globally and uncertainty ahead of a potentially deadlier winter.
"The immediate catalyst for lower prices appears to be market expectation that Libya's production is going to recover back to pre-civil war levels of more than 1m barrels per day in the next few weeks," wrote Edward Bell, senior director of market economics at Dubai-based bank Emirates NBD.
A relentless second wave of coronavirus cases across Europe and the U.S. has stopped oil demand recovery in its tracks, but the fresh prospect of increased supply is further raising the stakes for OPEC+, analysts at ANZ bank said.
Therefore, can we expect negative pricing as the Northern hemisphere heads into winter? Well, we'll have to wait and see. In the short-term, $36.6 is my target.
