Crude Oil Prices Jumpstart, but Rising COVID-19 Cases Curbs Gains

Crude oil prices recovered after falling for the most part at Asia’s trading period on Wednesday amid a reported build in U.S. crude oil stockpiles, renewing fears on energy demand that caused panic sell-offs last week.

At the time this report was written both crude oil benchmarks were trading higher than 0.3%.

Sequel to the recent stability in oil prices, it should be noted that both contracts plunged more than 4% on Monday, the highest in two weeks, though they gained yesterday surprisingly even though the dollar fired up on all cylinders.

Rising cases of COVID-19 infections in Western Europe along with renewed restriction in the world’s sixth-largest economy (United Kingdom) kept crude oil bulls at bay coupled with more crude oil supplies on its way from Libya.

The fears of the COVID-19 virus onslaught is prevailing on the price pattern, on the basis that oil bulls get burnt out as the world’s largest consumer of oil, death toll from COVID-19 onslaught surpasses 200,000, coupled with crude oil stockpiles gaining 691,000 barrels in the week to Sept. 18, compared with energy analysts anticipation for a draw of 2.3 million barrels.

However the bulls are riding on a valid case that gasoline stockpiles plunged by almost7.7 million barrels, suggesting that the U.S economy is definitely picking up, but the major reasons why the bulls falter after breaking higher is the jump in COVID-19 infections.

Although oil traders anticipate that resumption of a full lockdown scenario has seen in H1, 2020 in emerged economies doesn’t seem to be an option right now.

That said, the continual front and back remedies in solving the worst pandemic ever known in modern history is partly responsible for the price swings seen in the fragile energy market, and might keep on playing out this way until a COVID-19 vaccine becomes readily available.

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