Why are people watching the oil price right now?

These two ASX oil shares finished lower on Friday. Let's take a look at what some analysts think is ahead for the oil price.

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The price of Brent crude oil finished off last Friday at $55.41, says Bloomberg, down 1.23% for the day. This means the oil price has dipped for two straight sessions and is an indication, according to the Wall Street Journal, that investors have ongoing concerns about the impact of COVID-19 on travel restrictions and general economic activity.

Let's consider two of the bigger ASX listed oil businesses and how they've been navigating fluctuations of the oil price. 

Oil Search Ltd (ASX: OSH)

The Oil Search share price surged earlier this month. This followed release of the company's FY20 interim result. As stated in the results, Oil Search produced 14.7 million barrels of oil equivalent (mmboe) for the half year ended 30 June 2020.

The Oil Search share price jumped more than 5% following this announcement to trade around $4.10 a share that day. Last week, Oil Search finished off at $4.35 

Back in November, the company announced that it has started the search for a new chief financial officer (CFO). The current CFO, Stephen Gardiner, will continue in the role until 31 May 2021.

For the previous 12-month period, the Oil search share price has dropped more than 42%.

Santos Ltd (ASX: STO)

Santos was downgraded by Citi a week ago from 'buy' to 'neutral' based on a bouncy share price and lack of catalysts. If the analysts feel like they're not getting enough information from a company, this is what can happen. Potentially impacting the Santos share price.

Back in December, the Australian Financial Review mentioned that Santos was preparing to kick off $8.5 billion worth of oil and gas projects. This includes the $US2 billion Dorado oil project in Western Australia. 

Credit Suisse analyst Saul Kavonic said that the company's approach to growth "seems sensible". 

The Santos share prices has dropped more than 18% over the past 12-month period.

Will US politics and COVID-19 swing the oil price?

US president Joe Biden didn't waste any time signing executive orders that bring very different positions to effect than what we saw from his predecessor Donald Trump. The Australian Financial Review reported that Mr Biden cancelled the Keystone XL pipeline and implemented a 60-day suspension of new oil and gas leasing permits.

As countries continue being ravaged by COVID-19, the impacts continue to hit the travel industry. According to this weekend's Australian, the lack of international visitor's is currently costing Australia's tourism industry about $4 billion a month.

Regardless of these influences, one Credit Suisse analyst believes that oil can hit $US196 a barrel. Credit Suisse's impression is that the current business environment could present a buying opportunity, and it predicts the price is on the way up.

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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