Selling Pressure on Crude Oil Prices, as Momentum Shift downwardCrude oil prices drifted lower at London’s trading session on Thursday. The drop in the prices of the black gold is triggered on growing concerns about poor energy demand in the world’s largest economy after data revealed U.S. Stockpiles increased in the previous week rather than dropping as anticipated earlier by energy analysts, coupled with COVID-19 caseloads rising higher globally.
U.S. West Texas Intermediate lost about 0.24%, to trade at $37.96 a barrel at the early hours of London’s trading session, after gaining 3.5% yesterday
Brent crude prices dropped 0.12% to trade at $40.74 a barrel, after rising 2.5% yesterday.
COVID-19 caseloads surged in several parts of the world’s largest economy, with U.S stockpiles rose by 3 million barrels in the week that ended on September 4, 2020, as seen from data of the American Petroleum Institute, thereby making a strong case for the bears arbitrarily.
At the U.S trading session on Wednesday, crude oil bulls were riding high on the bias that all was well as global stocks picked up strongly, helping oil prices to go higher, but the party ended at Thursday’s opening of Asia’s trading session as oil traders retreated amid low volatility
Oil traders are presently clueless on the current situation of crude oil prices. Obviously, the bears seem to have the upper hand after crude lost several dollars on Monday and Tuesday. But, that doesn’t mean that any rebound is not going to happen as witnessed yesterday.
As a matter of fact, based on prevailing macros, Brent crude prices could breach below the $40 critical support levels, as bears wait for further ammunition from the surge in COVID-19 infections globally.
Not forgetting, COVID-19 concerns continue to be on the major headline with hopes for energy demand re-balancing fading as many developing markets which include many parts of Africa, Central America print unimpressive economic data coupled with the rise in COVID-19 caseloads in Europe, U.S, Canada and India.