19 Mar Oil Expectations Decline Amid Vaccination Concerns
In this week’s Rigzone market commentary, Validere’s Mark Le Dain sat down with Matthew V. Veazey at Rigzone to discuss insights on the impact of COVID-19 developments alongside Energy Advisors: Samuel Indyk, Jon Donnel, and Tom Seng. Keep reading for details.
The COVID-19 pandemic has weakened oil demand over the past year. The most recent hit to the oil market outlook stems from rising inventory levels and third wave threats amid vaccination concerns.
Samuel Indyk spoke on the effect of the temporary suspension of AstraZeneca’s (NASDAQ: AZN) vaccine. Fears of lockdown and a slow roll-out have impacted the market with the European gasoil crack at its lowest since November 2020.
Tom Seng pointed to decreased natural gas prices, resulting from moderate temperatures in the US and storage withdrawal that missed expectations. The EIA reported stored natural gas levels 12% lower than last year and the previous week, while total demand and withdrawal experience a significant drop.
An unexpected development in the market this week was Thursday’s drop in crude pricing. Jon Donnel was surprised by the decline’s delayed onset due to its main drivers, high inventory and COVID-19 concerns, being announced earlier in the week.
Validere’s Mark Le Dain noted that drilling permits are set to resume as normal. Biden’s ban in the issuance of drilling permits on federal lands is on track to expire without renewal. It seems this results from a public forum needing to analyze the ban rather than a relaxed stance on oil and gas from Biden’s administration.
To read more commentary on this week’s market review, click here.