However, the mood among oil executives is said to be optimistic: File Image/PixaBay
Oil traders broke a remarkable three-day winning streak on Thursday, due to an unexpected build in U.S. crude inventory as well as concern of equity traders' concerns over rising Covid infection rates; however, the losses were minimal.
Brent fell 27 cents to settle at $43.53 per barrel, while West Texas Intermediate fell 33 cents to settle at $41.12 per barrel.
According to government data, crude inventories rose by 4.3 million barrels last week compared with an anticipated draw of 913,000 barrels, and this combined with falling equity performance on Thursday due to the Covid infections caused Phil Flynn, senior market analyst at Price Futures Group Inc., to remark, "When stocks gave up gains, oil followed.
Bernard Looney, CEO, BP
We should have optimism, and we should have a sense of reality
"It's a very nervous market."
Meanwhile, in its monthly report released Thursday, the International Energy Agency noted that permanent refining capacity closures expected for 2020-2021 have risen to about 1.7 million barrels per day (bpd) - mainly in the U.S. - due to government restrictions to slow the spread of Covid.
The IEA added, "The bulk of the new announcements reflect pessimism about refining economics in a world suffering from temporary demand collapse and structural refining overcapacity."
The IEA also saw no immediate relief from this week's breakthrough of an effective Covid vaccine, saying "our forecasts do not anticipate a significant impact in the first half of 2021."
Still, a source told media that the mood during an an invitation-only gathering of more than 30 senior oil and gas executives for the Abu Dhabi CEO Roundtable was more upbeat than the last meeting held in June; participants expressed cautious optimism about the global economic recovery and discussed the need to focus on cost reductions and technology gains.
Bernard Looney, CEO of BP, said, "We should have optimism, and we should have a sense of reality.....the fundamentals that we all learned as we were growing up in this industry will serve us well in the long run."
Sultan Al Jaber, the minister of industry and advanced technology for the United Arab Emirates, remarked, "The oil and gas industry has demonstrated remarkable resilience over the past few months, and we know the long-term fundamentals of the industry remain intact as the world will still need hydrocarbons for many decades to come."