Page 8 - FSUOGM Week 01 2021
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FSUOGM                                        COMMENTARY                                            FSUOGM


































       A long, strange year:





       2020 in review






       NewsBase’s editors are marking the start of 2021 with a review of how each of the regions

       covered by our organisation was affected by the events of the past 12 months


        GLOBAL           WORLD oil markets have never quite recovered   At the same time, the lapse of the OPEC+
                         all of the ground they lost between mid-2014 and  production agreement at the end of March led
                         early 2016, when prices for Brent crude and West  Russia and Saudi Arabia to bring much more oil
                         Texas Intermediate (WTI) plummeted from  to market in the hope of gaining more market
                         levels above $110 per barrel to less than $30 per  share. (It also led other members of the group to
                         barrel. But in 2020, traders discovered that there  follow suit.) This rapid increase in supply took
                         was more room for these two benchmarks to fall.  place at a time when very little surplus crude
                           On April 20, WTI prices hit unprecedented  could be consigned to inventory, as most storage
                         lows, sinking below zero for the first time in his-  facilities were almost completely full. As a result,
                         tory. (Brent, by contrast, hit a 19-year low slightly  prices plummeted even more than they might
                         below $20 per barrel on the same day.) Prices did  have done otherwise – and the rest of the year
                         not stay at these levels for long, but they have not  was taken up by attempts to repair the damage.
                         regained all their strength either. As of the begin-  The clean-up campaign is not over. Neverthe-
                         ning of 2021, both were trading near $50 per bar-  less, NewsBase’s editors are marking the start of
                         rel, and some market observers were speculating  2021 with a review of how each of the regions
                         about the possibility of further declines, owing to  covered by our organisation was affected by the
                         disagreements over OPEC+ production quotas  events of the past 12 months.
                         and new lockdowns to combat the ongoing coro-
                         navirus (COVID-19) pandemic.         Africa: Delays and disruption
                           This speculation is hardly misplaced, given  Undoubtedly, Africa’s oil and gas sector has suf-
                         that OPEC+ production quotas and COVID-19  fered over the last year.
                         were the main reasons why 2020 wreaked such   Falling energy prices and weakening demand
                         havoc on the energy sector. The pandemic (and  caused export earnings to sink, and the decline
                         the public health measures taken to combat it)  imposed significant hardships on major produc-
                         caused oil and gas consumption levels to plum-  ers such as Nigeria and Angola, which are heavily
                         met astonishingly quickly in the first half of the  dependent on oil export revenues. They also left
                         year, even as they upended predictions about  some of these producers with large volumes of
                         future demand.                       crude and LNG that they simply could not sell



       P8                                       www. NEWSBASE .com                        Week 01   06•January•2021
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