Crude oil prices dropped momentarily on the mid-week trading session in London. The price fall is coming on the macro that shows high concerns that energy demand will continue to falter as the number of COVID-19 cases continues to rise, particularly in emerged markets. Recent statistics from Johns Hopkins University data revealed that the number of global cases surged past 38 million as of Oct. 14.
At the time of writing Brent oil futures prices lost 0.2 to trade at $42.35, and West Texas Intermediate (WTI ) fell 0.27% to trade at $40.09.
“China’s insatiable demand for all things oil has temporarily buttressed the oil complex after prices jumped on a better than expected import demand from China…”
It’s key to note that OPEC+ anticipated that in 2021 it would gain by 6.54 million barrels per day to 96.84 million barrels per day in its monthly report released yesterday.
However, the statistics were 80,000 barrels per day less than its last month forecast as some countries re-impose lockdowns.
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on the vital macro helping crude oil to stay at its present levels.
“China’s insatiable demand for all things oil has temporarily buttressed the oil complex after prices jumped on a better than expected import demand from China.
- But China cannot carry this recovery alone, the US demand needs to kick in.
- And while the data makes absolute sense, after all, China is the only massive oil-consuming economy that can boast any semblance of a V-shaped economic recovery.
- Still, the recovery remains all too fragile, as reflected through gnarly news flow, where a resurgence of Covid-19 is now apparent in many major economies.”
Bottomline: That said, crude oil prices are still vulnerable as the COVID-19 virus continues to spread like wildfire across the Northern hemisphere.