Oil in 2020 - 5 Key Events

2020 bought some dizzying highs and gut-wrenching lows for the oil industry, with most of the year heavily influenced by the coronavirus pandemic. Here’s a look at some of the key events that shaped 2020, as well as a glimpse of what’s to come in 2021.

January 1^st

Oil enjoyed a strong start to 2020, with Brent crude averaging US$63.65 in January. The upward trend was fuelled by geopolitical events such as attacks on Saudi Arabian energy infrastructure, as well as rising tensions between Iran and the United States. While the U.S. Energy Information Administration (EIA) did predict a slight fall in prices for the first half of the year, the forecast of US$62 per barrel for the month of May didn’t come close to describing the turbulence to come.

March 8^th

On March 8th oil plunged 24% after OPEC failed to close a deal with Russia. The tumble marked the worst price crash since 1991 for both U.S. West Texas Intermediate and international benchmark Brent crude. “We believe the OPEC and Russia oil price war unequivocally started this weekend when Saudi Arabia aggressively cut the relative price at which it sells its crude by the most in at least 20 years,” commented Goldman Sachs analyst Damien Courvalin.

March 11^th

On March 11^th the World Health Organisation declared the coronavirus outbreak a global pandemic. This prompted lockdowns around the world and triggered a massive drop in demand for oil. By the end of the month oil prices had fallen to an 18-year low, with US WTI settling at just over US$20 and international benchmark Brent crude falling to just under US$23 per barrel by the end of the month.

April 20^th

April 20th ushed in the darkest day in history for oil, with prices for May WTI futures slipping into negative territory. At its worst, the decline saw prices fall to -US$40.32 per barrel.

November 3^rd

The oil industry wasn’t exempt from the highly anticipated US election, with prices climbing 4% after Trump claimed a false victory on November 3^rd. Of course, Trump went on to lose the election to Joe Biden. While this didn’t send prices tumbling, many analysts maintain a Biden presidency will drag down oil prices in 2021.

While the oil industry is still facing incredible uncertainty, analysts are optimistic 2021 will bring positive momentum. The hope surrounding the COVID-19 vaccine has analysts eyeing prices of US55 for Brent, a figure that’s built around hopes of a relaxing of global lockdowns and an uptick in international aviation transport. Want to know more about the future of air travel? Don’t miss ‘Determining Water Separation Characteristics of Aviation Turbine Fuels’ for insight into the pros and cons of the various ASTM test methods