Oil Traders Long Bets Tamed on Rising COVID-19 Cases
Another macro compounding the woes of oil traders are the high prospect that more barrels of crude are coming to the fragile energy market if recent comments by the Libyan leader is taken to account. This has kept both oil benchmarks down by more than 0.8% at the latter stage of Asia’s trading session.
In the past week Oil futures gained 10 % higher as Oil traders felt optimistic that the new cop in town, will curb energy trading abuses, and curb oil glut fears prevailing in atop the minds of traders.
The price of the black hydro carbon derivative in the previous week came up on top has the New Sherriff in the energy market issued stern warning to over producing members and crude oil speculators.
If the Saudis can keep up their recent compliance efforts on the oil cartel output, it will go a long way soothing the fears of an impending oil glut . Excess crude coming to the fragile energy market would be reduced drastically over the coming weeks, enabling the rebalancing of demand/supply projection in the midterm.
That said, an uptrend may continue if a draw in U.S Stockpiles is recorded later in the week, triggering the bulls to push Brent crude prices above the $43/barrel level, which will be followed by approaching the critical resistance level $45/barrel and if it keeps on moving up above that level, it’s expected that Brent could reach resistance price level of $48.50-$49/barrel.
On the flipside, if the Libyan leader keeps to his word by pumping more crude, with the COVID-19 caseloads growing exponentially and a build in U.S crude inventories come to play, it’s most likely Brent crude prices will breach below the support level of $40 /barrel momentarily, which will be followed by more selling pressures towards the $38.50 support level.
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This article was originally posted on FX Empire
