Oil Price: did markets over-react to President Trump's coronvirus infection?

 

oil price friday

Oil price slipped in the market on Thursday and likely to remain this way for the next few days.

Some analysts were quick to relate the drop in price with President Trump being Covid-19 positive, despite the former happened a day before the latter’s official announcement about the infection.

As for the coronavirus infection of the First Couple, there are no indications of a major health scare; they might not even have symptom of the disease. Yet, some media has begun analysing the worst case scenarios, which in turn affect the market sentiments.

It looks like the markets responded to the news that OPEC increased the output by over a million barrels a day. The boost in production can be attributed to an increase in demand, a fact reflected by the EIA that said that the US oil inventories are on decline.

In this context, it is not right to dub the dip in price as a correction, correction took place years before.

As long as the US oil inventories are on decline, the oil price gets its upward momentum from it, not from President Trump’s body temperature data.

 

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