Not the outcome of the American elections, but the announcement of a well-functioning corona vaccine has caused a revival in the oil market.
The price of agricultural diesel has risen unusually quickly in 10 days from over €0,85 to almost €0,90 per liter (excluding VAT and including member benefits). For the first time since mid-October, the Brent index returned to $45 a barrel. In the meantime, during the hospitalization of US President Trump, the price had fallen below $40 per barrel. However, the impending change of power in the White House is not the driving force behind oil price developments.
Vaccine not effective until mid-2021
The increased oil price can be attributed to the news about the corona vaccine from the American pharmaceutical group Pfizer last Monday. In the days following the euphoria about the effective vaccine, a sense of reality has returned. If everything goes according to plan, it will certainly take until mid-2021 before the vaccination can actually normalize the economy. So it is unlikely that this week's rising oil price will continue in the coming weeks.
The reality is that the oil-producing countries united in OPEC will have to make a decision in the coming weeks about the pace at which production restrictions will be phased out. Due to the second corona wave, it is no longer so certain that extra oil will be produced as planned from January. It is true that the imbalance in the energy market during this second corona wave is much less than during the first wave, but the fact remains that the demand for energy is falling due to the second corona wave.
Little green electricity
At this time of year, the market for gas and electricity is mainly determined by the weather forecast. Never before this year have solar panels and wind turbines supplied so little green energy as last week. There was hardly any wind, but that will change in the coming week as depressions regain the upper hand in Western Europe. Although it doesn't look like it will blow as much as in some October weeks.
The limited supply of renewable energy supported the price of electricity. Gas also tends to rise slightly in price. This is mainly due to the time of year. So far this month, 20% more gas was used than in October, even though the month of November has been warm above average so far. It looks like the maximum temperature will drop below 10 degrees in the coming weeks.
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