Oil Prices at $64 a Barrel One Year After the Below Zero Collapse
One year ago oil prices fell below zero, but one year later oil prices have rebounded to $64 a barrel.
According to the Midland Reporter-Telegram, West Texas Intermediate is currently up 0.5% following a budget dispute causing production in Libya to go below one million barrels a day.
Demand for oil is forecast to make a comeback in the second quarter of 2021 now that people are getting vaccinated and states are opening back up.
Vitol Group is the largest oil trader and is expecting demand to be up significantly over last year.
"Follow-through buying is pushing prices further up but the immediate upside potential could be limited by the relentless march higher in infection rates," said Tamas Varga, an analyst at PVM Oil Associates.
April 20, 2020 was when oil fell to -$37.63 a barrel but a year later, prices are back around a normal rate thanks to vaccines and a decline in COVID-19 numbers.
"The market's recovery through the past year, though still clouded by uncertainty, makes a repeat of the April 2020 price crash highly unlikely," said Vandana Hari, founder of Vanda Insights in Singapore. "Some of the circumstances were unique to last year and the initial weeks of the pandemic, such as the confluence of the unanticipated shock of global lockdowns and demand destruction and OPEC+ opening the spigots."
So it looks like the rebound of demand in 2021 is going to help prices stay in the normal range of oil prices and be a much better year in the oil industry in 2021.