By Geoffrey Smith
Investing.com -- Crude oil prices rose to their highest in over two weeks on Thursday in the hope that U.S. politicians will after all agree some kind of targeted, or slimmed-down, stimulus plans to put a floor under U.S. fuel demand.
Supply issues were also to the fore, with signs that the strike among Norwegian oilmen is set to cause greater disruption to production there, and with Hurricane Delta forcing extensive shut-ins of production in the Gulf of Mexico.
By 10:30 AM ET (1430 GMT) U.S. crude futures were up 2.6% at $40.98 a barrel, while the international benchmark Brent was also up 2.6% at $43.10.
Prices have been supported by the positive tone in other risk assets after President Donald Trump changed tack on Wednesday to revive hopes for more government support at least for households and seriously challenged businesses such as airlines.
Further afield, a statement from Norway’s national oil company indicated that the Johan Sverdrup field in the North Sea, which produces over 450,000 barrels of oil a day, may shut down from next week, as the union steps up strike action.
“Production here has not been affected so far,” Sverdrup’s operator Equinor said in a statement. “This situation would change if the strike continues into 14 October."
Elsewhere in Europe, the Organization of Petroleum Exporting Countries issued new long-term forecasts for oil demand that, while less upbeat than before, were also less gloomy than comparable ones issued by the likes of BP (NYSE:BP) Plc, which said last month that global oil demand may peak within 10 years as the world uses the pandemic to accelerate the shift away from fossil fuels.
OPEC said that it doesn’t expect global oil demand to peak until well after 2030, and that it expects demand to be back above its 2019 peak by 2022.
OPEC’s head of research was cited by newswires as saying that the organization expects to work off the overhang of excessive stockpiles by the middle of next year.
That will depend on global demand continuing to recover, however. Such a scenario still seems challenging, given the recent sharp rise in coronavirus cases in Europe and the U.S. at the start of the winter flu season.
Bloomberg reported that traffic on Spain’s toll roads is down by some 20% from a year earlier, the biggest year-on-year drop since the end of August. France’s toll roads show a similar development, it added, while British vehicle use, which was down only 3% on the year in mid-September, is now down 11%.