Page 4 - AsianOil Week 01 2021
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AsianOil                                      ASIA-PACIFIC                                           AsianOil




       A long, strange





       year: 2020 in review






       The last year has left oil markets battered,
       bruised and struggling to pick up the pieces




        COMMENTARY       WORLD oil markets have never quite recovered  Russia and Saudi Arabia to bring much more oil
                         all of the ground they lost between mid-2014 and  to market in the hope of gaining more market
                         early 2016, when prices for Brent crude and West  share. (It also led other members of the group to
       WHAT:             Texas Intermediate (WTI) plummeted from  follow suit.) This rapid increase in supply took
       Panel no indent   levels above $110 per barrel to less than $30 per  place at a time when very little surplus crude
                         barrel. But in 2020, traders discovered that there  could be consigned to inventory, as most storage
       WHY:              was more room for these two benchmarks to fall.  facilities were almost completely full. As a result,
       Panel no indent     On April 20, WTI prices hit unprecedented  prices plummeted even more than they might
                         lows, sinking below zero for the first time in his-  have done otherwise – and the rest of the year
       WHAT NEXT:        tory. (Brent, by contrast, hit a 19-year low slightly  was taken up by attempts to repair the damage.
       Panel no indent   below $20 per barrel on the same day.) Prices did   The clean-up campaign is not over. Neverthe-
                         not stay at these levels for long, but they have not  less, NewsBase’s editors are marking the start of   Falling energy
                         regained all their strength either. As of the begin-  2021 with a review of how each of the regions
                         ning of 2021, both were trading near $50 per bar-  covered by our organisation was affected by the   prices and
                         rel, and some market observers were speculating  events of the past 12 months.  weakening
                         about the possibility of further declines, owing to
                         disagreements over OPEC+ production quotas  Africa: Delays and disruption  demand caused
                         and new lockdowns to combat the ongoing coro-  Undoubtedly, Africa’s oil and gas sector has suf-
                         navirus (COVID-19) pandemic.         fered over the last year.            export earnings
                           This speculation is hardly misplaced, given   Falling energy prices and weakening demand
                         that OPEC+ production quotas and COVID-19  caused export earnings to sink, and the decline   to sink
                         were the main reasons why 2020 wreaked such  imposed significant hardships on major produc-
                         havoc on the energy sector. The pandemic (and  ers such as Nigeria and Angola, which are heavily
                         the public health measures taken to combat it)  dependent on oil export revenues. They also left
                         caused oil and gas consumption levels to plum-  some of these producers with large volumes of
                         met astonishingly quickly in the first half of the  crude and LNG that they simply could not sell –
                         year, even as they upended predictions about  and could not put into storage either, since they
                         future demand.                       lacked the facilities to do so.
                           At the same time, the lapse of the OPEC+   Nigeria, for example, found itself stuck
                         production agreement at the end of March led  repeatedly during the spring with dozens of





























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