Crude Oil Futures

The oil price fluctuated much more than it did in  the previous week, purely owing to the news that US oil inventories have gone up, deviating from the existing trend. The price has been moving upwards recently in inverse proportion to the build-up of the US crude stocks. The development once agains shows the strong correlation between the US oil inventories and oil price. Of course, there are other factors that affect the oil price directly. The discovery of new oil fields in Africa and the dawn of some form of stability in Libya and Iraq may have played a role too on the supply side of the equation. The surging Covid-19 infections in the US will definitely push people off the pumps and will cast a shadow over the sentiments in the markets. The good news from India and Australia on this front, however, will make the trend short-lived; the threat of Covid-19 infection can be kept at bay - by strict restrictions enforced during short periods. Oil charts that matter are here: Oil Charts

  There is some good news from the world’s third biggest consumer of oil, India. This week, it was reported that India’s Covid-19 infection rates is down significantly. By coincidence, as if in proportion to the sentiment, the usage of diesel has gone up as well, indicating the recovery of industry output and the transport. Unlike during the first wave, people exercise caution while mingling in public; the use of mask may have made a difference too. The death rate stays very low as well. In short, people are slowly adapting themselves to live with it – the New Normal. That means, the industrial activities across the world will limp into action in the coming weeks the rest will follow. Since a solution to airline crisis does not seem to be in the offing yet, the price of jet fuel may not reach the pre-pandemic level, though. The revival of economies, both in Asia and Africa, will provide the Western world much needed impetus to emulate the success in the coming months. More