Oil Traders on a Roller Coaster, COVID-19 Onslaughts Rages On

Recent data retrieved from Johns Hopkins University data showed the number of global cases reached 38 million.

At the time of writing both major crude oil benchmarks, which include Brent crude and West Texas Intermediate futures traded above $40/Barrel.

Still, crude oil prices remain under pressure, on the bias showing crude oil bears taking charge of Asia’s trading session as crude oil bulls seem to be on a pause as it approached the $43/Barrel critical resistance level. This mentioned price level has been difficult for oil bulls breaking higher for a few months now coupled with the major macro of crude oil’s low chances of demand/supply levels adjusting to pre-COVID-19 era.

Brent crude prices still show a significant amount of strength at the $40/barrel price level but profit-taking is observed around the $42.50-$43.20 price levels as oil traders seemed to be exposed by the aurora of high geopolitical uncertainty. That said it’s seems unlikely for Brent crude prices to breach below the $38.50/barrel level.

Also taking note of the recent report released by the International Energy Agency warning that it will take about three years for energy consumption to return to pre-crisis levels, will definitely add pressure on oil prices in the long term, meanings it’s very unlikely to see the price of crude at the price level of $60/Barrel in Q1, 2021.

The International Energy Agency also raised flags on fossils, on the growing effect of renewables, which of late has shown a significant amount of interests, among global investors considering the fact, that an emerging renewable company, Tesla has outshined almost all western listed energy companies of late, on the bias that it offers better prospects than fossil allied companies and the strong bias that the world is switching more to renewable.