At least 40 oil tankers are waiting for better times off the coast of Rotterdam. They will be unloaded when the oil market picks up again, but for the time being there is no prospect of rapidly rising prices.
The supply of oil is still greater than the demand. The price appears to have found a new standard as long as fears of new coronavirus outbreaks grip the world. As many countries are easing the corona measures, there is growing concern about a possible new wave of contamination in the countries where the easing was first introduced, such as China, South Korea and Germany.
Just over 80 cents
Viewed in this way, it is not likely that the price of diesel for agriculture will soon rise above the euro. For weeks, the price has fluctuated just above 80 euro cents (excluding VAT, including volume and member discounts). So, according to the Financieel Dagblad, more than 40 oil tankers filled to the brim with oil and petrol are waiting for better times. As soon as the prices pick up, the ships will be unloaded.
New low for gas price
As in the oil market, a new normal price level also appears to have emerged in the electricity and gas markets. Severe price shocks are a thing of the past. In general, the demand for renewable energy is lower than the supply. On the weekend, when the wind picks up, it still happens that the daily price is negative.
The daily gas price was quite stable over the past weekend and the beginning of this week. During the week, the daily gas price reached a new low because there is much less storage capacity than usual.
OPEC and French Nuclear Power Plants
For the longer term, first and foremost, the course of the corona pandemic is decisive. In the oil market, further production restrictions by major players such as OPEC could push the price up. The planned maintenance of the dozens of French nuclear power stations plays a role in the gas market. Due to a lack of staff due to the corona crisis, this maintenance is delayed.
The renewable energy market could pick up if the demand for electricity increases, as soon as the summer heats up and the air conditioners are running at full throttle. There is a good chance that this will soon become true, because high pressure areas dominate the weather maps for the longer term and the sun steadily climbs higher in the sky on its way to the longest day.
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.
