Will COVID Change Seasonal Oil Patterns? 5 Things To Watch This Summer
Ellen Wald | Jun 18, 2020 06:05
This Saturday marks the official start of summer. Oil consumption and production experience typical seasonal patterns that traders, producers and consumers expect and plan for. However, this summer will be distinctly different as markets grapple with changes wrought by the coronavirus pandemic and economic dislocation.
Here are five things to watch in this atypical summer season:
1. OPEC+ Month-to-Month Production Reviews
OPEC+ is meeting again in July. OPEC+ normally convenes once during the summer to set production quotas for the second half of the year. This year, OPEC+ has caucused in March, April and June, and its actions—or failure to act—at each meeting impacted the markets.
The group intends to economic activity and oil demand over the last month and a half, but we don’t yet know when remaining jurisdictions will open. Opening economies could boost demand in ways that are different from what we normally see this time of year, but we must wait for news of when these openings will come.
5. Pressure On Summer Plans?
Summer tends to be a slower period for big business but a busy time for leisure activities. While many Americans typically vacation in the first week of July, in other parts of the world, like western Europe, August is usually the month to take a holiday. However, the question remains if the changed circumstances will impact summer plans in 2020.
The global economy is in the middle of serious dislocation. With many leisure activities closed and businesses struggling to make up for lost revenue, will the summer months be more like any other time of the year? Or do people need a vacation to recover from the stress of the pandemic?
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