Skip to main content

Oil prices extend gains and rig count shows a healthy growth

oil-rig-count


There is plenty of bad news on the Coronavirus front, especially in Europe, owing to the discovery of a new strain that has the potential to spread fast. 

The oil price, much to analysts' surprise, maintained the upward momentum, though, defying the gloomy news on the new infections.

Things may change slightly in the coming days as we enter the muted festive season. The oil price, however, will bounce back proving the critics wrong - once again.

In Western Europe where the lockdown measures are tough, there will be a decline in motor traffic - and air travel too - and it may reflect on the demand. As a result, the oil price will be affected to some extent in the coming weeks - something to be expected.

The fact of the matter, however, is that it is not something irreversible; nor has it reached the point of no-return. It's just an adjustment, due to the combination of seasonal impact and low traffic on roads.

The effect on oil price will gradually be eased in proportion to the progress on the vaccine front, as the latter determines the market sentiments. 

Moreover, the new strain of the virus has not led to an exponential increase in death despite the high infection rates.

We can only hope the virus will mutate into a milder form, as nature wants it to be, so that it can co-exist with us, the human beings, in order to fulfil its intended mission on the mankind in particular and nature in general.

 


Popular Posts

US rate cuts and Middle East Volatility struggle to excite oil markets

Image
  The price of crude oil experienced a slight uptick before the weekend, potentially influenced by the unexpected U. S. interest rate cut and escalating tensions in the Middle East. The recent Israeli attack on Lebanon, utilizing pagers, significantly intensified regional tensions, raising fears of an imminent war. Although skirmishes have persisted between Israel and Hezbollah for nearly a year, a major escalation was averted despite the loss of key Hezbollah commanders. Saturday night witnessed a tit-for-tat exchange of bombings and missile attacks. On the economic front, the Federal Reserve's interest rate cut has alleviated concerns about a U. S. recession. Lower interest rates encourage borrowing, stimulating business investment and consumer spending. Additionally, a weaker U. S. dollar makes oil more affordable for non-U. S. currency holders, increasing demand. However, short-term oil price concerns remain, as evidenced by the modest price increase. The gl
Read more

Chinese manufacturing activities picked up in September

Image
  www.oilfutures.co.uk The price of crude oil is still on a downward trajectory despite the volatility in the Middle EAST and some encouraging news about the Chinese economy. As for the Middle East, the IDF, Israel Defence Forces, made an incursion into Lebanon on Monday night while bringing the weeks-long speculation to an end; Israel did not want it to be known as a full-scale invasion, exactly like they did in the early 1980s.  In a matter of few days, defying the military analysts, Israel almost destroyed the upper echelons of Hezbollah,  the Shia military group  along with its charismatic leader in Lebanon. The development left Iran, the financial and moral backer of these proxies in the Middle East including Hamas, in the lurch; it looks like Iran is now exposed as never before in decades. In the current circumstances, it is highly unlikely that Iran will pursue a military campaign to show the region - or the world for that matter - who the real boss in the region is. The two hug
Read more

Oil prices: impact of Hurricane Milton and conflict in the Middle East

Image
  The US state of Florida is bracing itself for a direct hit by Hurricane Milton that develops into a major storm, on Wednesday.  Since the Gulf of Mexico is one of the most important region for energy resources and infrastructure, both onshore and offshore,  in the US, the world's top energy producer by far, it goes without saying the potential impact on oil and gas supply in the short run. The region, according to the EIA, US Energy Information Administration,  accounts for 14%  and 5% of world's oil production and 5% gas production respectively. In addition, says the EIA, the refining capacity of oil and gas in the region stands at 48% and 51% respectively. In short, there will be a significant impact on the supply side of the two commodities in the next few weeks. The price of crude oil that rose in the aftermath of the missile attacks launched by Iran against Israel, meanwhile, subsided a little on Tuesday as the anticipated retaliation did not take place at the weekend. A
Read more

Latest Energy News from EIA