MANILA – Even with the improvement in crude oil prices in the world market, an economist said it is not too late to stockpile oil to prepare for the recovery of the economy.
“It’s a good move to stockpile because prices will go up eventually. It’s still at USD35 a barrel. Forward curve is on the upsurge so this time to take the position is a good move,” Kuala Lumpur-based Juwai IQI chief economist Shan Saeed said.
Saeed projected global oil prices to trade between USD47 to USD57 per barrel by the end of the year.
Last week, Department of Energy Secretary Alfonso Cusi said the country will take advantage of the cheaper crude oil prices in the world market by stockpiling and using the commodity once the country further opens up.
“It’s a good move, it’s never late. I think it’s still a good time to stockpile,” Saeed said.
He said the oil market has recovered for nearly a month now and continues to maintain structural stability as demand picks up due to the opening of economies.
“Many countries have stockpiled for (a) few days when prices were low last month, including Pakistan and China. As the pandemic obliterates energy demand, China is reveling in a buyers’ market,” he added.
Citing the Juwai IQI market intelligence report, he said about 220 million barrels of oil went into storage in China in the first quarter of 2020.
“China has a growing demand for energy as (the) economy is getting back on track. This makes oil prices move up towards the north,” Saeed said.
Saeed said crude oil demand is expected to pick up by the second half of the year with daily demand reaching 90 million barrels. (IA/PNA)