WEEKLY ENERGY RECAP: Oil prices feel the pressure

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Updated 26 July 2020

WEEKLY ENERGY RECAP: Oil prices feel the pressure

  • ‘The only thing that can support a balanced market is a pickup in demand’

Oil prices moved with considerable momentum at the start of the week, touching four-month highs. But by the end of the week Brent crude had settled at $43.34 per barrel. WTI also edged up to $41.34 per barrel. 

Energy Information Administration data showed weakening gasoline demand after a surge in the number of coronavirus cases. The outlook for crude oil demand in the US turned bearish as the latest weak US jobs report fueled growing economic uncertainty.

While that was enough to trigger a sharp sell-off in equities, oil prices remained stable.

The US dollar slid to 22-month lows which would normally be accompanied by a rise in the inversely-priced crude oil. 

A weaker greenback usually spurs buying of commodities priced in dollars, especially oil, because they become cheaper for holders of other currencies.

But that didn’t happen this time and prices remained tethered to the narrow band where they have been for more than two months.

Another major macro-economic theme in the shape of the escalating US-China trade war was also shrugged off by the market. 

Refinery throughput also turned south suggesting that US oil demand is plateauing amid rising COVID-19 cases.

The number of long positions on the NYMEX WTI futures exchange fell by 6,205 contracts, compared with the previous week. It appears that speculators are staying away from the flat structure of current oil prices.

So as July closes out, oil prices remain trapped between the downside and upside pressures of the coronavirus and the recovery.

The only thing that can support a balanced market going forward is a pickup in demand and that will eventually happen.

But the shape and form of that pickup remains unpredictable.

Egypt inaugurates $3.4M hyrdocracking complex to produce petroleum products

Updated 27 September 2020

Egypt inaugurates $3.4M hyrdocracking complex to produce petroleum products

CAIRO: A new hydrocracking complex worth $3.4 million was inaugurated on Sunday by the Egyptian president in a ceremony north of Cairo.

The complex will produce 4.7 million tons of high-value petroleum products as part of Egypt’s ambitious program to enhance its refining industry, a local report said. 

It was established in cooperation with the private sector to produce high-octane gasoline and diesel. It converts low-value diesel into high-quality petroleum products, which include hydrocracking units for diesel, charcoal, vacuum distillation, sulphur treatment and naphtha repair, according to a report by Egypt Today news website. 

Work at the site, located in Musturud of Qalyubia governorate, began in 2011 but was halted due to the political turmoil that broke out that year, the Egyptian president said. 

President Abdel Fatah El-Sisi asked Egyptians to realize “the size of benefits from a complex like this for Egypt in the field of petroleum,” in statements quoted by Youm 7 newspaper.