Oil Price: the fear of a third wave takes its toll on the markets

 

Covid-19 surge in India

The oil price went down substantially today despite the encouraging news from airline industry about a slow, but steady recovery.

The hopes, unfortunately, were dashed when the new data emerges from India shows there is a steep rise in Covid-19 in India, especially in Maharashtra state where the commercial capital, Mumbai, is in.

The oil markets are always keen on watching the economic activities of the world’s third largest crude oil consumer. They pin their hopes on a rapid recovery from the worst economic contraction in 70 years, stemmed from a relatively successful vaccine drive.

It’s true that Indians dropped their guard somewhat while hoping the success of the distribution of vaccines would deal with the problem once and for all; the steep rise in Covid-19 infections clearly show that’s not the case, perhaps sending out a warning to the rest of the world too.

Covid infections in India


In neighbouring Pakistan too, there is an alarming rise in infections. Making matters worse for authorities, a rumour is spreading in the country about some of the content in the vaccines that is forbidden in Islam, which may put people off the vaccines when the collective sentiment reaches its critical mass, especially in the rural areas.

In Europe too, there is not much for celebration in terms of a post-pandemic era; France, Germany, Italy and Poland are on the brink of yet another major lockdown; these countries, however, could not get the vaccine drive underway successfully as the United Kingdom did, owing to some logistical issues; the anti-vaccine sentiment in the continental Europe is high too.

Summer holidays, meanwhile, are going to be banned for the second successive year due the pandemic, dealing a crushing blow to the tourism sector.

As of Monday, next week, anyone who goes to an airport without a valid reason will be fined £5000; similar restriction will be imposed on visitors too, especially if they are from Western Europe – for obvious reasons.

The government in the United Kingdom is trying its best to keep the threat at bay in order to minimize the loss of lives; although it may not go down very well with some of its own MPs.

All in all, a grim spectacle in on the rise again despite the endless precautions against the virus and the exponential increase in the vaccinations worldwide; this will take its toll on markets in the coming weeks and oil markets will not immune to it.

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