Most significant 2020 events that affected oil prices – Petronas’ view

Oil&Gas Materials 4 January 2021 10:32 (UTC +04:00)
Most significant 2020 events that affected oil prices – Petronas’ view

BAKU, Azerbaijan, Jan.4

By Leman Zeynalova – Trend:

The oil market has always been exposed to market volatilities and uncertainties. This is driven not only by geopolitical events but also structural shifts in the oil market, such as the surge in unconventional oil supply from the United States (US) which impacted the market in 2016 and the recent unprecedented demand destruction from COVID-19, Trend reports citing Malaysian Petronas company.

“The impact from COVID-19 was further exacerbated by the fallout between Russia and Saudi Arabia that triggered the oil producers’ move to maximise production to capture a bigger market share. The unrestrained production amid weak demand resulted in US West Texas Intermediate (WTI) prices falling into negative territory for the first time in history. Brent prices fell to a two-decade low of USD13 per barrel on 21 April 2020,” Petronas said in its 2021-2023 activity outlook.

The following events impacted oil prices the most in 2020:

3 Jan: US airstrike in Iraq killed Iran’s top general, fear of Iran’s retaliation;

18 Feb: US sanctioned Rosneft Trading over alleged Venezuela oil exports;

6 March: OPEC+ talk collapsed, Saudi Arabia slashed prices, triggering price war;

23 March: Oil prices slide to USD22.2/bbl on worsening COVID-19 and growing oversupply;

9 April: OPEC+ decided to reduce output by 9.7 mil bpd in May;

21 April: WTI plunged to USD37/bbl as May contract expired;

11 May: Saudi, UAE and Kuwait to deepen output cuts;

6 June: OPEC+ agreed to extend 9.6 mil bpd output cuts until the end of July;

1 Aug: OPEC+ eased production cuts from 9.7 mil bpd to 7.7 mil bpd;

19 Sept: Return of Libyan crude;

13 Nov: Libyan oil output exceeded 1.2 mil bpd.


Follow the author on Twitter: @Lyaman_Zeyn