As oil traders fretted on high COVID-19 numbers prevailing around the world as it distorted their minds on the weakening pace of the global economic recovery.
A the time of writing this report, Brent crude traded above $44/barrel and the U.S oil-based contract West Texas Intermediate futures dropped slightly to trade at around $41.66/barrel, as both major crude oil benchmarks traded above the $40/barrel mark.
Still, oil traders are not having an easy ride, in spite of the prevailing bullish trend, and concerns on COVID-19 second wave of attacks is steadily getting out of hand, as COVID-19 virus looks firmly attached across major emerged markets.
The pandemic has already disrupted the global economy, negatively, as demand for energy erodes significantly, meaning OPEC+ would continual need to intervene in the fragile energy market to keep prices supported, as oil bears await the latest U.S initial Jobless claims data, for deeper insights on the health of the world’s largest economy
That said, the oil market surprisingly outperformed expectations, as oil traders’ shrugged off the mixed American Petroleum Institute and Department of Energy data, taking into consideration the recent macro from the second-largest economy, China revealing positive import data, hinting oil traders that the worse is definitely over.
Brent crude prices are ranging between the $43.88 – 44.58/barrel with no catalyst to break over the $44.8/barrel price level on the bias showing oil traders are forced to hedge the downside risk as it could be a matter of time before the growing political uncertainty currently playing out in the U.S could lead to the shutdown of the whole holiday season.
However, it will be costly for Oil traders to rule out the bullish trend prevailing relatively on market sentiments showing positive news from Pfizer announcing the final results of its Covid-19 vaccine trial showing it had a 95% success rate coupled with Oxford potential vaccine showed seen as having “encouraging” immune response in older humans means crude oil bulls could get enough boost to break above $45/barrel.