Crude oil prices rallied higher on Friday at the opening of London’s trading session.
The black liquid is on track for a weekly decline because of rising concerns about the global resurgence of COVID-19 infections and its effects on fuel demand, while additional supplies from Libya continue to weaken oil bulls’ prospect.
Brent crude is heading for a price decline of around 2.5% this week with WTI also on track for a price fall of about 1.5%. Both benchmarks are also heading for a monthly decline, which would be the first for Brent in six months.
What we know; Brent crude (LCOc1) was up 0.41% to trade at $42.11 a barrel by 0706am GMT, while U.S. West Texas Intermediate (WTI) crude (CLc1) gained 0.42% to trade at $40.48.
Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics spoke on the price movement of crude oil with prevailing macros affecting the price.
Saying, “Oil prices bounced overnight as investors turned optimistic that the US Congress may resume stimulus discussions that have been stuck in the swap. Lawmakers were all ears after a chorus of US Federal Reserve committee members were again at pain to point out the need for additional fiscal support. And cries from the world’s top central banker Jerome Powell struck a chord during this week’s testimony to Congress and the Senate. Lawmakers in contentious election battles can ill afford the negative press around Congress’ dithering during the next 6-week election run-up. A US stimulus package pre-November election is very much underpriced and could be a significant catalyst for oil’s demand function and could punch prices higher.”
However, supply-side dynamics are quite more encouraging than before and should get reflected in a strong downtrend in inventories over the next few months.