Oil Prices Down Amid Coronavirus Infection Surge
Oil Prices Mastered Amid Coronavirus Contagion Surge
There are fears that a record ascension in global coronavirus infections could halt the recovery of demand levels for fuel general, pushing down global oil colour prices despite continuing tight supply levels.
Demand Expectations
Up heretofore, oil prices had been propped up by the recommencement of increased economic activity worldwide as governments had begun to ease lockdown restrictions that brought the world to a draw near-stalemat in April and May.
Producers have also been keeping add levels tight; Canada and the US dropped the numbers of active oil and gas rigs to record low levels last week.
Meanwhile, OPEC+ – the Organization of the Petroleum Exporting Countries and its allies, plus Russia – is still mulling over whether to keep its 9.7 million barrels per day supply reduction in place for August.
OPEC
If they were to do so, this would be the fourth calendar month of supply cuts for OPEC+. But although no decision has yet been ready-made by the OPEC+ group, the member countries of Iraq and Kazakhstan have already indicated they leave comply with any agreed production reductions.
Another indication of tightening supply is the price of Brent crude futures – oil for delivery now is currently much pricey than oil for later delivery, a situation called backwardation.
Simply the main reason making oil markets jumpy is the record chute in global cases of COVID-19 announced at the weekend by the Creation Health Organization.
Americas
Although nearly European countries seem to be over the peak of the virus, the epidemic's epicenter is straight off in Northwards and South America, and this could have a major global impact.
According to Michael McCarthy, chief market strategist at CMC Markets:
"The possible social science damage of a modern round of COVID-19 countermeasures will apt contain any investor ebullience."
In increase to the increased infection rates in the Americas, other areas of the world have seen territorial outbreaks – Beijing in China and the state of Victoria in Australia are notable examples – and these spikes sustain resulted in movement controls existence imposed on the universe.
The consequence could be even further drops in demand for global oil, and consequently continued downward pressure level on prices.
by DayTrading.com
Source: https://www.daytrading.com/oil-prices-amid-coronavirus-infection-surge
Posted by: rileygoter1991.blogspot.com
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