Oil prices set for modest recovery on OPEC+ cuts

Analysts expect global demand to contract by between about 6.5 million-8.7 million bpd this year, compared with last month’s prediction of 6.4 million-10 million bpd. (Shutterstock)
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Updated 01 July 2020

Oil prices set for modest recovery on OPEC+ cuts

  • Experts say a resurging virus could bring further restrictions and stifle demand

BENGALURU: Oil prices will consolidate at around $40 a barrel this year, with a recovery gaining steam in the fourth quarter and into 2021 on OPEC-led production cuts and as economies limp back from coronavirus lockdowns, a Reuters poll showed on Tuesday.

The survey of 45 analysts forecast benchmark Brent crude would average $40.41 a barrel in 2020, up from a forecast of $37.58 in a similar survey last month.

The global benchmark has averaged $42.10 so far this year. It was trading just below $42 a barrel on Tuesday, while West Texas Intermediate (WTI) crude was at $39.19.

The poll estimated the price of WTI would average $36.10 a barrel this year, up from a forecast of $32.78 in the May survey.

Of the 37 contributors who participated in both the May and June polls, 26 raised their 2020 Brent forecasts.

“The pace of this recovery will remain modest in the third quarter,” said Harry Tchilinguirian, head of commodity research at BNP Paribas.

But he said it would “accelerate in Q4 under the combined effect of voluntary output restraints by OPEC+ producers, market-driven production declines and a sequential recovery in demand with the reinstatement of economic activity reinforced by monetary and fiscal stimulus measures.”

Under a new agreement the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, have been cutting output since May by a record 9.7 million barrels per day (bpd) to support prices and demand hit by the pandemic.

OPEC+ compliance with the cuts in May was 87 percent.

However, analysts warned that a global rise in COVID-19 cases, which is approaching the 10.5 million mark, could potentially spark further restrictions and slow any economic recovery, and in turn, demand.

Analysts expect global demand to contract by between about 6.5 million-8.7 million bpd this year, compared with last month’s prediction of 6.4 million-10 million bpd.

“End-2020 demand will likely fall well short of end-2019 levels given that people will take some time to return to their old habits after restrictions are lifted,” said UBS analyst Giovanni Staunovo.


Chinese artificial intelligence company files $1.4 billion lawsuit against Apple

Updated 03 August 2020

Chinese artificial intelligence company files $1.4 billion lawsuit against Apple

  • Xiao-i argued that Apple’s voice-recognition technology Siri infringes on a patent that it applied for in 2004

SHANGHAI: Chinese artificial intelligence company Shanghai Zhizhen Intelligent Network Technology Co., also known as Xiao-i, has filed a lawsuit against Apple, alleging it has infringed on its patents.
The company is calling for $1.43 billion in damages and demands that Apple cease “manufacturing, using, promising to sell, selling, and importing” products that infringe on the patent, it said in a social media post.
Xiao-i argued that Apple’s voice-recognition technology Siri infringes on a patent that it applied for in 2004 and was granted in 2009.
Apple did not respond to a request for comment. Reuters was not immediately available to find a copy of the court filing.
The lawsuit marks the continuation of a row that has been ongoing for nearly a decade.
Shanghai Zhizhen first sued Apple for patent infringement in 2012 regarding its voice recognition technology. In July, China’s Supreme People’s court ruled that the patent was valid.