Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
Vladimir Zernov
WTI Crude Oil

Oil Video 15.10.20.


Fears About The Second Wave Of The Virus Put Pressure On Oil

Oil was not able to avoid the negative impact of the global market sell-off. Traders fear that the second wave of coronavirus in Europe will lead to a second wave of lockdowns which will put pressure on the economy and hurt demand for oil.

While the potential second wave of lockdowns looks scary, oil traders have mostly ignored the negative developments on the coronavirus front in recent weeks.

It looks like the market does not believe that new restrictions could seriously hurt demand for oil. For example, France has recently imposed a curfew on its biggest cities.

The curfew will certainly put pressure on small businesses in the services segment but its impact on demand for oil will be limited since the country did not impose any restrictions on travelling.

Interestingly, oil has managed to stay near the $40 level despite recent indications from OPEC+ that production will increase by 2 million barrels per day (bpd) at the beginning of 2021 despite the second wave of the pandemic. At this point, it looks like oil has found strong support near this psychologically important level.

Crude Inventories Decline By 3.8 Million Barrels

EIA has just reported that crude inventories fell by 3.8 million barrels. Gasoline inventories declined by 1.6 million barrels while distillate fuel inventories decreased by 7.2 million barrels.

There were two main catalysts for the decline in inventories. First, crude oil imports were down by 447,000 barrels per day (bpd) from the previous week. Second, U.S. domestic oil production declined from 11 million bpd to 10.5 million bpd due as the hurricane forced U.S. Gulf of Mexico oil producers to evacuate workers from oil platforms.

While the inventory report was bullish, it remains to be seen whether oil will be able to settle back above the $40 level amid virus fears. The U.S. oil production will soon get back to its previous levels so additional demand for oil is required to put more pressure on inventories.

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

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.