Oil price inches back, as countries take COVID vaccine
Kaieteur News – The price of Brent crude is slowly rising after nearly a year of sinking, as countries have begun to receive and administer the COVID-19 vaccine.
Brent, Guya’s Liza standard traded-off crude, was comfortable at over US $ 60 a barrel in early 2020. However, due to the Russian-Saudi Arabian oil price war and more critically, the COVID-19 pandemic, Brent crash to US $ 20 in the Spring. Today, Brent is nearly $ 51 a barrel. Guyana’s first million barrels had been sold at US $ 55 a barrel.
Earlier this month, the United Food and Drug Administration (FDA) approved the Pfizer and BioNTech coronavirus vaccine for emergency use, following Canada and the United Kingdom. The vaccine is being introduced for first responders, key public officials and others. U.S. President-Elect Joe Biden got the vaccine he was given yesterday on national television. Yesterday, the European Medicines Agency (EMA) – the European Union’s regulator of medicine – also approved the drug for its population of 400 million and more.
As the vaccine becomes more widely administered and some key sectors begin to recover, oil prices could continue the slow upward gains, which they have made over the past few months.
For Saudi Arabia and Russia, negotiations between Russia and the Saudi-led Organization of Petroleum Exporting Countries (OPEC) broke out over planned oil production cuts in the midst of the pandemic. By the end of the first half of the year, Russia and Saudi Arabia agreed to production cuts.
Due to the price crash this year, Petroleum Advisor and Attorney-in-Law turned Minister for Culture, Youth and Sport, Charles Ramson, in March that there would be a significant dip in forecasted revenue in Guyana. While the country is expected to have US $ 300 million of oil revenue added to the Natural Resources Fund this year, actual revenue came up to less than half that.
The rest of the world has suffered too. In April, Rystad predicted that offshore drillers would lose more than US $ 3 billion in contract value. Many exploration and production companies like ExxonMobil and Hess were forced to sell assets to focus cash on their most profitable projects, like Guyana.
The result of the pandemic has also strengthened calls made by sustainable energy, so that the shift away from oil is increased. Exxon, for example, has put a lot of pressure from its investors to significantly reduce its emissions.