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Adesina Olumide
Crude Oil

Crude oil prices bounced higher at the last trading session of the week. The impressive gain recorded in the energy market is partly attributed to the better than anticipated plunge in U.S crude oil inventories released recently.

In addition the hawkish statement by, Saudi Arabia’s Prince Abdulaziz bin Salam after the just conclude OPEC+ meeting, sent strong signals to over producing members and most especially targeting crude oil speculators, reminding them there is a new OPEC cop in town.

Abdulaziz bin Salam resolves to keep OPEC in line with the oil cartel’s set agenda can’t be underrated, as he had earlier threatened to deal with oil speculators, and wreck their means of livelihood. These types of statements from major oil powers like the Saudis are rarely witnessed, much more targeting the energy trading world.

Crude oil prices in the past few days recovered from its recent lows, amid impressive economic data seen in the United States and China, as both benchmarks surged past $40/barrel.

However, its present price levels, reveals the black liquid derivative is sensitive to the pace of the global economic recovery and crude oil demand/supply rebalancing in the mid-term.

The rally began, few days ago when data reports coming from the second-largest economy in the world printed it’s on track for recovery, giving the bulls the need gas to breach above the $40/ barrel.

However it’s most unlikely that crude oil prices in the case for Brent crude breakout above the $44/barrel this week, as there is still a massive concerns on crude oil oversupply. Even with its recent surge, traders anticipate that the energy market will struggle to make a new high, at least without some type of significant catalyst like the COVID-19 vaccine.

Oil prices in the mid- term remain fragile to the speed of economic recovery and fundamentals on global supply.

For a look at all of today’s economic events, check out our economic calendar.

 

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