OPEC’s Reinforced Outlook Triggers Oil Bulls Run

Oil bulls are riding high on current macros, pointing to the effect of the disruption on Colonial Pipeline, a major US fuel pipeline, which was recently hit by a ransomware cyber-attack thereby tightening oil supplies momentarily, kept West Texas Intermediate futures trading above $65 a barrel and the British based oil contract, Brent crude futures was nearing $69 a barrel, at the time this report was drafted.

Consequently, recent data retrieved from the American Petroleum Institute revealed that weekly oil inventories plunged by about by 2.5 million compared to the anticipated drop of about 2.25 million.

Though energy experts reveal such drawdown is partly attributed to the cyber-attack of Colonial Pipeline that occurred some days ago, a major oil pipeline that moves more than 2.5 million barrels a day of fuel.

Still, oil bulls are aware that short-term demand for oil seems to be softening on the account that the current decline is far less than last week’s drop of 7.7 million barrels.

In its monthly report, the oil cartel group left its evaluation on the maturation of global oil demand unchanged at 6 million barrels per day, though energy pundits revealed rising COVID-19 caseloads at India, the third-largest consumer of crude oil might be the major reasons why there wasn’t a more bullish outlook, despite strong economic readings from the United States and China.

However, recent price patterns suggest Brent crude bulls will face an uphill task breaking above two major resistance levels pegged at $70 and then $71.50 a barrel on the bias the resurging viral attacks occurring at some key economic hubs poses a threat to global energy demand/supply rebalancing.