Gloom may be misplaced

Oil sector defies gloomy reports to record best month

Maersk oil field

Producers are enjoying a recovery in the price and company values

Oil prices rose for a fourth straight day, shrugging off the latest industry reports pointing to a weak outlook.

One study by Aberdeen & Grampian Chamber of Commerce in partnership with the Fraser of Allander Institute and KPMG forecast one in five firms in the North Sea planning to cut jobs next year. Another pointed to a higher-than-unexpected rise in US crude stockpiles.

The Aberdeen study found 22% of contractors laid off more than 10% of their workforce in 2020 following a sharp decline in oil prices.

However, it was undertaken before the recent surge in stock markets and oil prices on hopes that COVID-19 vaccines will boost fuel demand.

Brent crude was up 54 cents, or 1.1%, at $48.40 a barrel by 0247 GMT, having risen almost 4% in the previous session. West Texas Intermediate crude gained 47 cents, or 1.1%, to $45.38 a barrel, after rising more than 4% on Tuesday.

Both contracts are at their highest since early March and have rallied nearly 10% in the last four days.

“The broader market is in de-risk mode as we now have three effective vaccines that can combat the virus,” said Kevin Solomon, energy economic analyst at StoneX.

Investors are betting on forthcoming virus vaccines easing the pain on various industries that have been hit hardest by the pandemic, from tourism to energy.

Global energy shares have risen almost 34% so far this month, on track for their best month on record.

There has also been a Biden bounce and hopes have risen of a Brexit deal before Britain leaves the EU on 31 December.

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