Il price of oil sinks and strangles everyone. But in the analysis of what is happening there are some partial consolatory signals. The International Energy Agency (IEA) provides it to us in its latest report just released. The collapse, as we know, is dramatic, contributes in no small way to bringing down the financial markets and it has heavy repercussions on producers who are unable to agree on even a temporary cut in production. Expectations are however for a rather fast recovery already within a few weeks when the Coronavirus will loosen its global grip, as analysts and experts predict or rather hope.
THE BOTTOM OF THE BARREL
The lowest peak in oil prices is that of these days, estimates the IEA, which expects a rather rapid recovery up to exceeding, at the turn of next summer, the average prices prior to the current crisis. Certain, 2020 will be marked by the drain on both global consumption and average selling prices markedly lower than last year, but the year will close with comforting signals and prices will consolidate their recovery in the medium and long term as well. However, the increase will be mitigated by a persistent problem that will remain in the field for a long time: overproduction, given the prospective incapacity of the producing countries to agree on a remodulation of production that can truly balance prices.
The table provided by the IEA accompanying its latest report is emblematic of the contingent phase and of the immediate future. Three scenarios designed: the reference one, the most pessimistic one for prices (following a possible failure or an extension of the timing of the strategies expected to contain the virus) and the moderately more optimistic one. Therefore, downward scenarios compared to those designed just a month earlier. In any case – the IEA tells us – average demand will end 2020 in decline, for the first time since 2009, due to the sharp contraction in oil consumption in China and the global slowdown in transport and trade. "The coronavirus crisis - reads the IEA report - is having an impact on a broad spectrum of energy markets, including coal, gas and renewables" creating the classic vicious circle especially on everything that revolves around the economy and production. And so from the more than 101 million barrels a day consumed in the world in the last part of last year, it has now collapsed to 96 million, with a collapse that already gathered speed last autumn.
RECEIVED IN SIGHT
Uncertainties for the future? Very many, but the IEA experts venture a positive perspective, however discounting a solution or at least a signal that problems related to the coronavirus will already be resolved within a few weeks. “The impact of the coronavirus on oil markets could be temporary” cautiously ventures Fatih Birol, executive director of the IEA. "The drives towards the recovery of demand continue, however, in perspective, to be concrete" continues Birol, who confirms the prospective picture which indicates an expected growth in demand between 2019 and 2025 at an annual rate just below 1 million barrels per day. The global increase will be 5,7 million barrels per day over the period, with China and India contributing about half of the expected growth. The problem, however, will remain that of imbalance between supply and demand, which will confirm and indeed risk increasing the overproduction scenario. In the same period, production capacity is expected to grow by 5,9 million barrels per day, three quarters of which by non-OPEC countries (United States and others).
