Crude Oil Traders Wary, on Energy Demand RebalancingIt’s no longer news, crude oil prices are bouncing up and down at close price ranges in the past weeks, in spite of a recent draw in the world’s largest economy oil stockpiles.
Traders are becoming nervy on the pace of global economic growth, as rising cases of COVID-19 continue to make major headlines.
Brent crude, the global benchmark for the black liquid derivative, closed at $41.92 suffering losses of 3% w/w.
U.S crude oil prices settled at $40.04 per barrel, posting a plunge of 2.1% w/w.
The latest oil cartel’s meeting held late last week failed in calming the edgy nerves of oil traders, as there was no strong reaffirmations by major producing members on oil production cuts till the close of 2020.
Also, macros, coming from Africa’s leading oil producer, revealed the Libyans planned to raise its oil production output by around 260,000/barrels per day in the coming days up from about 100,000/barrels per day. Such a report has already led to price pullbacks at its most recent trading session, with crude oil bulls extinguishing some of their long positions momentarily.
Another valid macro, dampening the hopes of crude oil bulls is the latest statement coming from St. Louis Federal Reserve President James Bullard, on his bias that there might be no need for additional stimulus packages for the world’s largest consumer of oil in 2020 based on the ongoing adaptation of businesses and households to coping with the COVID-19 pandemic.
Although it’s expected West Texas Intermediate prices remain above the $38.50/ barrel in the near term as the Chinese of late had increased buying pressures on U.S. crude, perhaps in an attempt to meet up its obligations on the energy import quotas agreed with the Americans in 2019 and also taking advantage of the relatively cheap price of the black liquid derivative.