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Action-Packed Week Wraps Up for Oil Market  | Rigzone

Action-Packed Week Wraps Up for Oil Market  | Rigzone

A massacre. Disrespect. Stashing away foreign currency. Buying weapons. Although such themes sound like ingredients in an action movie that you might watch at home during the coronavirus pandemic, they all have something to do with Rigzone panelists’ impressions of oil market events from the past week. Keep reading to find out why.

Rigzone: What were some market expectations that actually occurred during the past week – and which expectations did not?

Tom McNulty, Houston-based managing director with B. Riley Financial’s Great American Group: The bloodbath in the global oil business continued unabated. Some mini-rallies in West Texas Intermediate (WTI) and Brent did not last.

Barani Krishnan, Senior Commodities Analyst at Crude falling another five percent or so this week was expected, though not the Senate’s dismissal of the $3 billion asked by Trump to shore up reserves under the Strategic Petroleum Reserve (SPR). To me, it was a slap directly on the President’s face, given how hard he was pushing for the stimulus to include the additional 77 million barrels for the SPR.

Rigzone: What were some market surprises?

Krishnan: Saudi Arabia’s omission of any discussion on oil during the virtual G20 (Group of 20 meeting) it hosted was a surprise. It was a clear sign that the Kingdom was not in any mood for a ceasefire in its price war with the Russians and U.S. shale.

Mark Le Dain, vice president of strategy with the oil and gas data firm Validere: The continued discussion around OPEC as the problem or solution surprised us. We’re in the camp that demand loss is around 20 million barrels. While we expect a strong recovery in the fall, the near-term impact from the demand loss is unavoidable. If anything, the Saudis probably see this and are trying to shore up their FX (foreign exchange) reserves.

McNulty: I’d be surprised if Washington isn’t reminding Saudi Arabia which nation put 500,000 troops into the desert to keep Iraq from invading them in 1990-91. Maybe that’s what (U.S. Secretary of State Mike) Pompeo is doing, I don’t know. I’d like to think so. After all, Saudi Arabia cannot buy their F-15s and laser-guided bombs on eBay.

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