Crude Oil Traders Remain Wary of Present Seasonal Abiotic TrendsCrude oil prices began the first trading week on a bullish note as oil traders ramped up their long position after hurricane Sally forced major U.S oil players to shut their production in the Gulf of Mexico.
It’s important to note that the Gulf of Mexico has the highest concentration of oil rigs than another place on earth, as expected both benchmarks rallied higher, however, the bears capped such gains on the basis that the energy market might be saturated, will oil demand falling arbitrarily and COVID-19 caseloads reaching a record high.
Oil traders have it on the back of their mind that crude oil prices usually do not perform very well during the September period to the end of October.
That said, traders are wary of Libyan commander Khalifa Hafta’s recent assurance of reopening the Libyan energy sectors and pump crude to an energy market already suffering from weakening demand making it difficult for Brent crude prices to breach above the $40.50/barrel mark at London’s trading session.
Crude oil traders are also concerned on the present seasonal abiotic trends could increase the already exponential rise of COVID-19 caseloads on the bias that the northern hemisphere heads to autumn and social-economic activity go indoors where the spread of the COVID-19 virus could be more rapid.
Without any doubt this could put the oil cartel in an even more giant pickle when they hold a virtual meeting on Thursday to review the current oil output intervention in relationship to price impacts.
Looking at the price pattern and excluding significant macros like Libyan supply plans it’s most likely Brent crude remains above the $38.50 support level most of the week, as traders await major monetary policies from leading central banks that include Japan, United Kingdom, and the United States
However, the biggest headline for trading will be tracking the inventories across gasoline and distillates, as any build could breach the critical support levels of both international benchmarks, as remains the most worrying issue for day traders.