Connect with us
nairametrics

Commodities

Crude oil prices fall due to fresh wave of COVID-19 caseloads

Brent crude is expected to stay below the $45 resistance levels in the coming days.

Published

on

global oil market, Bonny Light and Brent crude oil, Arthur Eze, Nigeria cuts crude oil production to 1.77mbpd, Nigeria wants international oil companies to pay up now , OPEC+ deal gets a boost as Russia and Saudi Arabia consider further output cut, 4 key reasons why Brent crude might slip back to $35 per barrel, How substantial is compliance for the Oil market?

Crude oil prices dropped on Tuesday morning at London’s trading session. The price drop is due to concerns from oil traders that energy demand is plunging as a fresh wave of COVID-19 caseloads around the world ignite another wave of lockdowns. Moreover, OPEC+ has begun to relax its crude oil production cuts.

West Texas Intermediate dropped 0.73% to $40.71 a barrel as of 05.23 GMT, while Brent crude futures lost 0.77% to grade at $43.81 a barrel.

The fall in these international crude oil benchmarks is happening despite better-than-expected data on manufacturing activity in Asia, Europe, and the United States. Reports yesterday indicated that industries are emerging from the worst of the early COVID-19 pandemic impact.

READ MORE: Gold price rises further due to influx of new COVID-19 cases

Insight: In his usual notes to Nairametrics, Stephen Innes, the Chief Global Market Strategist at AxiCorp, explained why crude oil prices are expected to trend downward despite positive economic macros recorded recently from emerged markets. He said:

GTBank 728 x 90

“The improving macro data likely pared a few weaker shorts overnight. I think it is fair to say that most oil market participants expected more downward pressure on oil to start the week with Covid-19 ravaging the landscape and OPEC + adding more barrels into play.

“The theme remains the same, however, with prices hovering around the $44/barrel level this morning as demand recovers from 2Q lows but stammers from fully recovering because of the continued impact of Covid-19 on oil demand.”

READ MORE: Chelsea Football Club owner sells gold mining stake for $1.4 billion

GTBank 728 x 90

Outlook for Brent Crude: While it remains unclear where crude oil prices might be heading to in the short term, the worst-case scenarios similar to the lows recorded in April 2020 have been ruled out. However, the skies are not blue yet for crude oil traders. Brent crude is expected to stay below the $45 resistance levels in the coming days.

Olumide Adesina is a French-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment Trading. Member of the Chartered Financial Analyst Society. Behavioral Finance, Duke University. You can follow Olumide on twitter @tokunboadesina or email [email protected]

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Commodities

Crude oil prices post third weekly losses in four weeks

Crude prices printed their third weekly loss in four at the end of its most recent trading session.

Published

on

Where next for oil prices?, Brent crude futures gained 0.14 to trade at $34.70 at the time this report was drafted, recovering some of its losses earlier in the oil trading session. , Brent crude price fails to remain over $40, concerns over pledge cut strengthens

Crude prices printed their third weekly loss in four at the end of its most recent trading session.

Oil traders are concerned about the blurred demand outlook in the short term, as an unexpected build in oil production coupled with additional oil supplies Libya, rattled the nerves of oil traders.

What we know; West Texas Intermediate futures, the key gauge used to determine U.S. oil prices, settled at $40.04 per barrel. For the week, West Texas Intermediate lost 2.1%.

Brent crude, the world’s benchmark for crude oil prices, settled at $41.92 for the week, Brent lost 3%.

The most recent OPEC+ meeting failed to reassure traders about oil-producing members, complying with production cuts till the end of 2020.

GTBank 728 x 90

Also reports from Libya in the past week revealed it expected to raise production by around 260,000 barrels per day, by next week, up from some 100,000.

Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics spoke on supply-side fundamentals of crude oil by saying,

“Again, it been another week where traders have been inundated with dreary demand news, but it was supply-side fundamentals that supported crude oil again this week.

GTBank 728 x 90

“Prices have been backed with the Department of Energy (DOE) inventory stats showing a crude draw and the same a significant drop in gasoline stocks.

“Supply is far less of a problem to the view than demand. Robust compliance from OPEC+ on cuts and limited upside for US production should keep supply below demand in for the foreseeable future and help global inventories move in the right direction.”

Continue Reading

Commodities

Gold prices suffer worst W/W decline since March

Gold futures prices settled at $1.866.30/ounce, showing a loss of 0.56% at the last trading session of the week.

Published

on

ETF, stocks, shares, investment, equity,Gold loses some shine on hopes for COVID-19 vaccines

Gold futures declined on Friday, to post a loss of nearly 5% for the weekthe largest weekly percentage loss since mid-March. Gold traders have had significant losses on the precious metal to the strength in the U.S. dollar this week.

What we know: Gold futures prices settled at $1.866.30/ounce, showing a loss of 0.56% at the last trading session of the week.

READ: FG inaugurates gold refinery project, boosts smaller-scale mining operations

Rising COVID-19 caseloads in emerged markets have distorted investment strategies of global investors, as the world’s economic recovery seems to be fragile, driving investors into dollars, which has weighed on the bullion-asset.

On top of that, gold traders have also unwound some of their gold holdings as a part of this week’s equity-market sell-offs, which added to the pressures around precious metals.

GTBank 728 x 90

READ: Gold loses $70 dollars in an hour after reaching $2,000

Other precious metals such as palladium, platinum are also headed for their worst week since the COVID-19 pandemic began to impact financial markets.

Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, highlighted the key macros dampening the optimism of gold bull.

GTBank 728 x 90

READ: Gold Prices cross $1800, first time since 2011

“Gold investors remain less than flattered by the procession of Fed speakers since the FOMC less dovish than expected retort on September 16.

“Most of the focus was still falling on the US Fed’s Charles Evans’ uncomplimentary for gold comments when he suggested that US interest rates go up before the 2% inflation target is hit.”

That said, the outlook remains positive for gold in the long term, on growing COVID-19 cases; also, high geopolitical uncertainty could keep the yellow metal above $1,700/ounce price level in the midterm.

Continue Reading

Commodities

Oil prices propel above $40/barrel but bulls prospect remains weak

Brent crude (LCOc1) was up 0.41% to trade at $42.11 a barrel by 0706am GMT.

Published

on

Crude oil prices surge, as China plans to import large volumes of U.S. crude

Crude oil prices rallied higher on Friday at the opening of London’s trading session.

The black liquid is on track for a weekly decline because of rising concerns about the global resurgence of COVID-19 infections and its effects on fuel demand, while additional supplies from Libya continue to weaken oil bulls’ prospect.

Brent crude is heading for a price decline of around 2.5% this week with WTI also on track for a price fall of about 1.5%. Both benchmarks are also heading for a monthly decline, which would be the first for Brent in six months.

READ: FIRS moves to stop tax evasion with newly launched intelligence system 

What we know; Brent crude (LCOc1) was up 0.41% to trade at $42.11 a barrel by 0706am GMT, while U.S. West Texas Intermediate (WTI) crude (CLc1) gained 0.42% to trade at $40.48.

GTBank 728 x 90

Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics spoke on the price movement of crude oil with prevailing macros affecting the price.

READ: Oil prices slump over prolonged COVID-19 restrictions, Libya resumes production

Saying, “Oil prices bounced overnight as investors turned optimistic that the US Congress may resume stimulus discussions that have been stuck in the swap. Lawmakers were all ears after a chorus of US Federal Reserve committee members were again at pain to point out the need for additional fiscal support. And cries from the world’s top central banker Jerome Powell struck a chord during this week’s testimony to Congress and the Senate. Lawmakers in contentious election battles can ill afford the negative press around Congress’ dithering during the next 6-week election run-up. A US stimulus package pre-November election is very much underpriced and could be a significant catalyst for oil’s demand function and could punch prices higher.”

GTBank 728 x 90

However, supply-side dynamics are quite more encouraging than before and should get reflected in a strong downtrend in inventories over the next few months

Continue Reading
Advertisement
Advertisement
Advertisement
ikeja electric
Advertisement
Patricia
Advertisement
FCMB ads
Advertisement
Advertisement
IZIKJON
Advertisement
Fidelity ads
Advertisement
first bank
Advertisement
bitad
Advertisement
deals book
Advertisement
financial calculator
Advertisement
deals book
Advertisement
app
Advertisement