Oil Pares Monthly Gain With Global Supply Onslaught Looming — Financial Post

(Bloomberg) — Oil is set to eke out a monthly gain, yet futures lost steam on Friday amid threats that the market may soon become oversupplied.

While deep production curbs by the Organization of Petroleum Exporting Countries and its allies have helped oil rebound from its plunge below zero in April, the group is poised to ease the cuts at a time when the coronavirus pandemic is still ravaging demand. In fact, Exxon Mobil Corp. said it only sees an oil consumption recovery well into 2021.

Meanwhile, U.S. shale producers are signaling supply will come roaring back over the next few months with futures near $40 a barrel. ConocoPhillips said this week that it will restart most wells that were shut by September.

„The market’s indicating that it wants to see if the extra supply just ends up going into inventory or are we going to see signs of demand recovery,“ said Gene McGillian, vice president of market research at Tradition Energy.

Oil has been caught in a rut with the pandemic limiting travel during the usually active summer driving season. Adding to troubling signs over an economic recovery, U.S. consumer sentiment extended its slide in late July as the virus led to renewed business closings and layoffs. Exxon and Chevron Corp. posted the worst losses in a generation as the virus combined with a global crude glut battered their businesses.

„The big worry is that we’re about to go into August and this is the last two weeks or so of potential driving vacations,“ said Bill O’Grady, executive vice president at Confluence Investment Management in St. Louis. „You’ve had depressed demand for gasoline and it’s probably not going to get a whole lot better from here.“

OPEC+ plans to return about 1.5 million barrels a day to the market next month after cutting global supply by roughly 10% when demand plunged.

Pointing to further weakness, gasoline refining margins are at the lowest seasonal level in years, showing refiner profitability is facing pressure as the pandemic keeps Americans at home and off the road.

With not much to support the market right now, John Kilduff, a partner at Again Capital LLC, said investors are waiting to see what heating oil demand will look like this winter.

©2020 Bloomberg L.P.

Bloomberg.com

Autor: uwe.roland.gross

Don`t worry there is no significant man- made global warming. The global warming scare is not driven by science but driven by politics. Al Gore and the UN are dead wrong on climate fears. The IPCC process is a perversion of science.

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