Oil price remains strong: clear signs of Coronavirus fatigue

 

oil price at Christmas

Oil price does not seem to be dependent on the Coronavirus news any more whether the latter comes in the form of spikes, waves or even the formulation of new vaccines.

The price remains strong defying the factors that could otherwise have brought it down significantly.

The investors have finally realized that the world will deal with the pandemic at some point - or new variants will be less deadly than what we saw at the beginning of the year.

A stable oil price close to $50.00 a barrel is good both for the consumers and oil producers for several seasons.

The consumers can keep their fuel bill at a manageable level at a very difficult time when uncertainty looms on many fronts.

As for producers, especially in the Middle East, they can just balance the books and minimize the social unrest in the hope things will improve; there is already unrest in Iraq, the country with massive oil reserves, next to Saudi Arabia, over its currency devaluation – the worst ever.

In addition, the livelihood of millions of migrant workers from Asia which depends on these economies can be saved; their remittances have been an economic lifeline for the countries where these workers come from.

In this context, collapsing oil price is in nobody’s interest – in the long run.  Some may rub their hands with glee at the pump in the short run, but negative consequences far outweigh the outbursts of misplaced sentiments in a matter of months.

 

 

 

 


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