oil prices

Spanish economy 27th April 2020

Historic Drop In The Oil Price: How Will It Affect The Spanish Economy?

Caixabank Research | A fall in the price of oil provides a boost to the economy of countries that are net importers of crude oil, as is the case for Spain. Cheaper oil equates to an increase in the real disposable income of households, such that it also supports aggregate consumption. However, the health crisis that has gripped us following the COVID-19 outbreak will result in this boost derived from a lower oil price not being reflected in the economy, at least for the time being.

World economy 21st April 2020

Not Only Rates But Also Oil Prices Can Go Negative

Julius Baer | The oil market continues to write history. The past days and weeks brought us an unprecedented demand collapse, unprecedented oil politics and the absolute novelty yesterday: negative oil prices. The US benchmark West Texas barrel sank by -305% and became negative at -37.63 $/b. Before you rush to the petrol station, negative prices are a temporary glitch reflecting stressed flows in the futures markets and stressed storage conditions somewhere in the US Midwest.

World economy 27th March 2020

Saudi Arabia And Russia: Who Will Back Down First?

Eirini Tsekeridou (Julius Baer) | Oil prices have declined massively over the last weeks, as Russia and Saudi Arabia could not reach an agreement regarding output cuts. Saudi Arabia is trying to punish Russia, while Russia is seeking to hurt US oil producers due to US sanctioning of Russian companies. US shale producers, especially the highly leveraged ones, will face default as their breakeven price is about USD 50 per barrel.

World economy 4th March 2020

Pre-OPEC Meeting : Will The Organization Restore Brent Backwardation?

Nitesh Shah (Wisdom Tree) | With the coronavirus spreading around the world, the market is understandably scared that demand for crude oil will fall hard this year. Brent oil prices have fallen from a peak of US$68/barrel in the first week of January to US$56/barrel currently (24/02/2020). We believe that the backwardation in the Brent oil futures curve is generated by the fact that OPEC is ready to intervene.

World economy 15th February 2020

How Sustainability Affects Integrated Oil & Gas Firms: Credit Quality Stable; ESG-Linked Issues Down

Growing concerns from US and European investors and regulators over the sustainability of integrated oil and gas companies’ business models have brought forward their potential impact on the sector’s credit quality to the medium from long term. Scope Ratings says the near-term, 2020 credit outlook for the integrated oil & gas sector remains stable.

Markets, World economy 12th January 2020

What US-Iran tensions mean for investors

Neil Dwane (Allianz) | The financial markets are signalling that the situation in the Middle East won’t get out of hand, but US-Iran friction could continue for some time. The defence industry and oil and gas-related sectors could remain well-supported, but overall we believe investors should be cautious yet patient. Look to higher-quality stocks with lower correlations to the broader market and “hunt for income” if headline volatility is a risk you wish to avoid.

World economy 9th January 2020

Oil: Political markets have short legs

Norbert Rücker (Julius Baer) | Oil prices sold off more than 4% as concerns about supply risks in the Middle East calmed. The latest actions and reactions show that both opponents, the United States and Iran, are shying away from a military escalation out of fear of its potential economic costs. We stick to our Neutral view on oil and see oil prices lower towards year end. Demand should remain soft amidst weak growth, while supplies increase from Canada to the North Sea.

World economy 9th January 2020

US is more relaxed about oil spike than Europe – which helps explain differences over Iran

Mueid Al Raee (The Conversation) |Whether or not the Americans actually want higher oil prices, there are certainly good economic reasons why they probably won’t mind them. Deepening the chaos that started with the US withdrawing from the West’s nuclear deal with Iranis an “easy” way to achieve higher oil prices while meeting other strategic objectives. Yet how the Europeans, China and Russia respond will also determine the global flow of oil from Iran and Iraq.

Markets, Opinion, World economy 7th January 2020

Oil: 2020 Spells Geopolitics For Energy

Norbert Rücker (Julius Baer) | The oil market is off to a rocky start as the tensions between the United States and Iran escalate. The situation brings lots of uncertainty and geopolitical tea-leaf reading on reactions. While the closure of the Strait of Hormuz remains a very unlikely event, the deterioration in Iraq bears supply risks. Geopolitics tend to be a temporary force on oil markets and we believe this time is no different. We raise our near-term forecast to USD 65 per barrel, and maintain a Neutral view on oil.

World economy 23rd September 2019

Sustained 10% increase in oil price only cuts 0.1% from growth 10% in US and EU

Bankia Estudios | The sharp increase in oil prices produced by the attack on Saudi installations happened as a moment of weakness in the global economy with multiple centres of uncertainty (trade war, Brexit, global industrial recession, among others); however, it would have to be persistent and much more intense to derail global expansion.

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