CCTV Transcripts

CCTV Script 06/05/20

— This is the script of CNBC's news report for China's CCTV on May 6, 2020, Wednesday.

The reason for the sustained rise in international oil prices is that major economies are starting to restart their economies, leading the market to believe that the weak demand will improve, and investors are also cautiously optimistic about progress on production cuts in major oil producers.

First, the previous OPEC + agreement to cut production, which went into effect on January 1, will reduce output by 9.7 million barrels a day. Data from the U.S. energy information administration also showed that U.S. crude oil production in the week ended April has fallen by about a million barrels a day from its peak in March. Big oil companies, including Exxon Mobil, are cutting production. Active rig counts have been down for seven weeks, by May 1st the total had fallen to 408, less than half the level of a year earlier.

Norway and Canada have also restricted production, Although the international oil price continues to rise recently, it is still deep in the bear market.

WTI and Brent are now 68 per cent and 62 per cent below their 52-week peaks earlier this year.

So, the oil market is still very weak. The global space crunch has not improved significantly.

American Petroleum Institute estimates that U.S. crude inventories rose a further 8.44 million barrels in the week ended May 1. On the other hand, there are still many risks in restarting the economy, and the speed of recovery of demand is still unknown. So, most analysts expect it could be some time before oil prices return to pre-epidemic levels.

The energy industry is reshuffling under the onslaught of ultra-low oil prices. Sawiris, a well-known billionaire investor in Egypt, believes that if viewed from a longer-term perspective, international oil prices may soar to an extremely high level of US $ 100 per barrel after 18 months.

Naguib Sawiris



Because now that the shale industry will vanish for at least 1-2 years, and the startup is going to be difficult because banks are going to be very reluctant to finance them back. And now even traditional oil, many of the U.S. facilities have closed down. So much production has to be stopped completely to cut their costs and their losses. So, the world is growing anyhow, even with this recession. So, the offering would be less than the need, the asking, so the price would go back up very high. 

Based on optimistic expectations of a rebound in oil prices, the United States' largest crude oil fund, the United States Oil Fund, has also been favored by retail investors, and rose nearly 10% in Tuesday trading.

Because the current international oil price is at a very low level, so you may have to get used to seeing a large rise and fall in the next period of time and it will follow closely with key information and data on economic restarts, epidemic developments, and demand and supply. We will keep an eye on this issue.