All Eyes on Prices as Industry Waits to See What Happens NextFri, 04/03/2020 - 16:46
A week of trepidation and challenges in oil and gas, which is still reeling from the double impact of plunging demand and prices. But amid the misery are some reasons for optimism.
Here's the week in oil and gas!
Mexican Crude Basket Makes Great Gains
The Mexican Crude Basket saw gains of 51.27 percent on Thursday, following dismal performance throughout March. While its basket had fallen to a low of US$10.61 per barrel, Thursday’s run – driven by a tweet from US President Donald Trump – saw it climb to US$16.05 per barrel and as of Friday afternoon prices have not changed.
Brent Crude and the WTI mix, two of the world’s great benchmarks, also enjoyed a run earlier on Thursday. As of Friday morning, that run is continuing.
Fitch to Assess PEMEX’s Rating
Another one of the Big Three credit rating agencies is to look at its rating of PEMEX, following the disastrous impact of the Russia-Saudi Arabia price war and COVID-19’s demand destruction. Fitch's announcement comes after S&P’s downgrade last week.
Production Must Slow Before World Hits Storage Maximum
Rystad Energy experts warned of the risk of reaching maximum capacity in the world’s storage terminals from the increased production of Saudi Arabia and Russia and the drop in demand. The company’s COVID-19 report suggested that another oil price collapse was on the cards if a resolution is not found within a month.
While oil tankers and the wet storage industry have enjoyed a spike in business, all eyes are now on OPEC’s April 6 meeting.
Mexico to Increase Refining Production
In an attempt to reduce the “waste” of Mexico’s crude production, President Andrés Manuel López Obrador said that the country would increase refining production by 400Mb/d. The president said his strategy was driven by the desire not to rely on the sales of crude outside of Mexico after returns dwindled due to the oil collapse.