This was further strengthened by the continual weakening of the greenback, massive global stimulus packages, amidst rising crude oil inventories.
Brent crude gained 0.45% about to trade at $44.49 a barrel by 8.07 am; also, the West Texas Intermediate gained 0.14%, to $42.11 a barrel.
Usually, when the greenback falls, traders usually go long on global stock markets and commodities in principle.
Noting how quick the crude oil market bounced from its record lows when priced at $16, in April 2020, crude oil traders relatively have been bullish on oil in recent weeks as major oil producers, led by the Saudis and Russians, doing all they can to keep the price of crude stable.
However, the latest data revealed U.S crude stockpiles gained about 4.9 million barrels in the week to July 17 to 536.6 million barrels, compared with expectations in a Reuter’s poll for a 2.1 million-barrel drop. Production increased to 11.1 million bpd, up by 100,000 bpd.
This data above show all is not well yet. It’s wise not to put much importance on a single week’s inventory report as crude oil traders look into the long term horizon.
The high prospect of a solution to curb the pandemic mid-term will keep oil ranging from the $40-$45 levels for Brent crude, as recent economic macros show the worse might be over
With massive stimulus packages and good signs from various Covid-19 vaccines early trial result, crude oil traders, could breach the strong support level of Brent at $45, regardless of OPEC+ easing some curbs on its crude oil output by 2 million barrels per day.
Unprecedented stimulus measures to boost battered economies would continue to provide structural support for riskier assets, said Kay Van-Petersen, global macro strategist at Saxo Capital Markets in Singapore.