Oil Prices Take a Tumble on COVID-19 Resurgence
Key points
- Covid-19 resurgence takes a shot on oil bulls with oil prices dipping
- WTI reacts to $58 pb demand level
Oil prices recorded one of their worst weeks since October 2020. Much of last week saw Crude Oil post losses for 5 straight days over the resurgence of Covid-19 and slow vaccine roll out in Europe. The emergence of a new Covid-19 strain has hit Europe’s parts, forcing nations to reimpose lockdowns that have negatively affected oil price. Also, suspension of the Oxford/AstraZeneca vaccine over possible side effects has further complicated issues on the economic recovery of Europe, which has hampered energy demand.
While OPEC+ is still holding out production cut till April 2021, U.S stockpiles have risen, with most refinery already operational after the extreme cold put them out of operations.
West Texas Intermediate (WTI) dropped 6.4%, with price settling at $58 per barrel and Brent Crude fell 6.8%.
Technical outlook
Following the events that are happening in Europe, we saw a sharp sell-off in oil price. US oil prices retreated from their highs at $68 per barrel on the daily time frame after breaking out from the yearly high of $65. Bulls found support at the $58 demand zone and are currently seeking for more buying pressure to take the price back to the supply level of $68. Should the scenario worsen in Europe, which will surely affect energy demand and oil stockpiles continue to increase, the energy sector will likely record more losses in the next coming weeks.
Disclaimer: This material is a marketing communication and shall not in any case be construed as an investment advice, investment recommendation or presentation of an investment strategy. The marketing communication is prepared without taking into consideration the individual investors personal circumstances, investment experience or current financial situation. Any information contained therein in regardsto past performance or future forecasts does not constitute a reliable indicator of future performance, as circumstances may change over time. Scope Markets shall not accept any responsibility for any losses of investors due to the use and the content of the abovementioned information. Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
