Oil Price: crude tide hits the buffers; more momentum needed to hit above $70

 

weekly oil price

Crude oil price that has been rising steadily for weeks failed to creep into all-important $70 territory defying the expectations of the analysts.

There are concerns about a sluggish increase in demand despite the impact of the pandemic being on the wane and vaccination campaigns in full swing across the world.

The anticipation of yet another US crude inventory build-up and an unexpected decline in the US rig count may have affected the enthusiasm of the investors.

Moreover, some countries in Europe, Africa and in South America show anxiety over a potential third wave of the pandemic with certain variants of the Coronavirus; Italy, Kenya and Brazil are some countries that try to keep the threat of yet another wave of the pandemic at bay.

Although some analysts believed that there would be a spike in oil price when the US announced its latest stimulus package, its effect died down much faster than they thought it would.

OPEC+ must be watching the trend carefully, because they did not want to flood the markets with excess oil. If the price of crude oil does not go beyond $70, they may stubbornly stick to the same formula that they agreed on in March.

Saudi Arabia has been asking the members to be vigilant and it wants to exercise caution before changing the status quo for months. Saudi Arabia has every right to feel elated for getting the price strategy right in the middle of market chaos during the past few months.

Next week, all eyes will be on the factors that usually help build the momentum of the rise in price; the oil rig count and the US crude oil inventories, for that matter, will be under intense spotlight in the coming days.

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