Oil Prices Are Up, But Here's The Truth About Demand, Supply And Earnings
Ellen Wald, PhD | May 07, 2020 19:02
In the last week, the oil market saw some minor positive news, including signs that demand numbers might be turning around while supply has dropped. But the positive news is limited and tempered by negatives as well.
At the same time, public oil companies, which just recently reported earnings for their latest quarters, have been providing the first taste of just how devastating this oil price crash has been for the industry. Below, a realistic look at where demand, supply and oil equities stand now.
1. Demand
Oil prices rallied a bit this week with Brent finally crossing the $30 mark.
The price movement announced an additional round of reductions to operating and capital expenditures after cutting back twice in March. The company has now lowered its planned spending by 50% compared to what it previously indicated it would spend in 2020. A deeper reduction will mean less development of future oil resources and less supply from these companies in the long-term.
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