Oil set for 20% drop in 2020 as lockdowns weigh

Lockdowns have paralyzed much of the global economy this year, and global crude oil markets are no exception.

They've lost about a fifth of their value.

On Thursday (December 31), the last trading day of the year, Brent was down around 1% while U.S. West Texas Intermediate lost just under a percent.

But prices have rebounded strongly of late, as governments rolled out stimulus.

Both Brent and WTI have more than doubled from the decade lows seen in April, when prices fell into negative territory for the first time, sending shockwaves across the market.

But a monthly Reuters poll on Thursday (Dec 31) showed oil prices are not expected to make much progress in 2021.

While rollouts of vaccines and trillions of dollars' worth of fiscal support are expected to boost spending, concerns over lockdowns are expected to cap gains.

New restrictions in Britain have hit near-term demand, weighing on prices.

While hospitalizations and infections have surged in parts of Europe and Africa.

The next major oil price driver will be a January 4th meeting of the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+.

They'll debate boosting output from February.

Video Transcript

- Realized much of the global economy this year and global crude oil markets are no exception. They've lost about a fifth of their value. On Thursday, the last trading day of the year, Brent was down around 1% while US West Texas Intermediate lost just a percent.

But prices have rebounded strongly of late. As governments rolled out stimulus, both Brent and WTI have more than doubled from the decade lows seen in April when prices fell into negative territory for the first time, sending shockwaves across the market. But a monthly Reuters poll on Thursday showed oil prices are not expected to make much progress in 2021. While rollouts of vaccines and trillions of dollars' worth of fiscal support are expected to boost spending, concerns over lockdowns are expected to cap gains.

New restrictions in Britain have hit near-term demand, weighing on prices, while hospitalizations and infections have surged in parts of Europe and Africa. The next major oil price driver will be a January the 4th meeting of the Organization of the Petroleum Exporting Countries and allies, including Russia, a group known as OPEC Plus. They'll debate boosting output from February.