Oil Bears Clawing Down amid Soft Energy Demand

Brent oil futures prices at the time of writing remained above $41/barrel, while West Texas Intermediate futures drifted below $40/barrel.

Oil bears are presently cruising on the Energy Information Administration report released yesterday showing a 1.001 million-barrel drop for the week to October 16, smaller than the anticipated 1.021 million-barrel draw and much smaller than last week’s 3.818 million-barrel draw.

In addition, the data report also printed a 1.895 million-barrel build in gasoline stockpiles in the world’s largest economy, as against the 1.829 million-barrel draw anticipated in the previous week’s 1.626 million-barrel drop.

Unsurprisingly the soft demand is largely attributed to the restriction of human mobility seen in Western Europe as the number of COVID-19 cases surpassed 40 million. Fears were also exacerbated by China’s plan to curb overseas travel in order to limit the spread of the COVID-19 virus.

That said, crude oil prices are still likely to remain above their key support levels in the near term on U.S stimulus deal hopes, and the oil cartel’s renewed compliance effort expected to power on further in order to protect the plunge for crude oil prices.

Oil traders seem to have some assurance on the basis that the Oil Sheriff in the person of Saudi Energy Minister, Prince Abdulaziz bin Salman will support crude oil prices from at least dropping to prices seen in March and April, as he had in the past showed efforts in dealing with speculators and over producers.