Invest
Oil could see single-digit prices
Following Russia and Saudi Arabia ramping up oil production as demand for oil falls, consumers could be the major winners as the price of petroleum drops to single digits, industry experts have suggested.

Oil could see single-digit prices
Following Russia and Saudi Arabia ramping up oil production as demand for oil falls, consumers could be the major winners as the price of petroleum drops to single digits, industry experts have suggested.

State Street Global Markets (SSGM) said it can’t rule out oil prices below US$10 a barrel as demand drops by more than 20 million barrels per day.
“As we look at pictures of empty streets in London, New York and other major cities around the world, it is clear 2020 is going to see far fewer miles driven,” said Ben Jones, multi-asset class strategist at SSGM.
“US gasoline consumption alone averages 9 million barrels per day throughout the year and would normally be expected to increase in the coming months as the US driving season (April-September) gets underway. However, the reverse trend is likely to be seen this year, as it is not just local travel restrictions that are hitting oil demand.”
Airlines are also grounding large sections of their fleets, and while planes are still transporting cargo, a “conservative estimate” of 50 per cent fewer flights would still see a reduction of 5 million fewer barrels of oil a day.
“Despite these statistics, major oil producers continue to pump more,” Mr Jones said.
“From 1 April, Saudi Aramco will open the taps and produce 12 million barrels of oil a day, up from an average of 10 million. From a budget perspective, Saudi Arabia will need oil prices of around $87 to breakeven, whereas Russia needs oil at just $42. There is no sign that Saudi Arabia and Russia will return to the negotiating table any time soon, so we expect little softening in either’s stance.”
US shale may be able to sell to the US Strategic Petroleum Reserve at relatively high prices, but with supply now exceeding demand by more than 20 million barrels a day, those stores could fill within three to four months.
“Storage is profitable at the moment, as the futures market has moved into “super contango”. However, oil has had its worst quarter ever in dollar terms, but single-digit oil is still a possibility,” Mr Jones said.

Commodity
2021 to kick off 3-year-long investor heaven, property investors predict
Property investors unanimously agree that 2021 will kick off a three-year favourable investor environment with strong price growth. ...Read more

Commodity
Joining the buyers club: How to build a hefty passive income in your 20s or 70s?
“2021 is going to be the year of low stock levels, low interest rates, increased confidence and the chase for yield as people look to replace their incomes.” ...Read more

Commodity
How this investor entered the market 4 years after the last boom
Although he looked to capitalise on Sydney’s property boom a decade ago, luck would have it that Rizul Makkar would only begin to build his property portfolio four years later. ...Read more

Commodity
Electricity price hikes are coming, expert warns
The opening of Santos’ Narrabri gas pipeline will likely see consumers pay a higher price for gas, an expert has said. ...Read more

Commodity
Morrison’s technology roadmap slammed
The latest Coalition energy initiative has been slammed by a union body, which claimed that it is a substitute for a coherent national energy climate policy. ...Read more

Commodity
What’s so precious about metal?
As countries continue to battle the COVID-19 health pandemic, investors are turning to the safe havens of precious metals — a trend that’s likely to continue, according to an expert. ...Read more

Commodity
Global chocolate consumption melts on COVID-19 outbreak
The COVID-19 crisis has taken a bite out of chocolate sales, collapsing the price of cocoa, according to new research. ...Read more

Commodity
What’s up with the price of gold?
In today’s negative yield environment, buying gold to diversify and decrease market volatility “has never been so favourable” – and it’s why the price of gold is peaking, according to a mark...Read more

Commodity
2021 to kick off 3-year-long investor heaven, property investors predict
Property investors unanimously agree that 2021 will kick off a three-year favourable investor environment with strong price growth. ...Read more

Commodity
Joining the buyers club: How to build a hefty passive income in your 20s or 70s?
“2021 is going to be the year of low stock levels, low interest rates, increased confidence and the chase for yield as people look to replace their incomes.” ...Read more

Commodity
How this investor entered the market 4 years after the last boom
Although he looked to capitalise on Sydney’s property boom a decade ago, luck would have it that Rizul Makkar would only begin to build his property portfolio four years later. ...Read more

Commodity
Electricity price hikes are coming, expert warns
The opening of Santos’ Narrabri gas pipeline will likely see consumers pay a higher price for gas, an expert has said. ...Read more

Commodity
Morrison’s technology roadmap slammed
The latest Coalition energy initiative has been slammed by a union body, which claimed that it is a substitute for a coherent national energy climate policy. ...Read more

Commodity
What’s so precious about metal?
As countries continue to battle the COVID-19 health pandemic, investors are turning to the safe havens of precious metals — a trend that’s likely to continue, according to an expert. ...Read more

Commodity
Global chocolate consumption melts on COVID-19 outbreak
The COVID-19 crisis has taken a bite out of chocolate sales, collapsing the price of cocoa, according to new research. ...Read more

Commodity
What’s up with the price of gold?
In today’s negative yield environment, buying gold to diversify and decrease market volatility “has never been so favourable” – and it’s why the price of gold is peaking, according to a mark...Read more