Crude Oil: prices fall as Eurozone enters double-dip recession; setback is temporary, though
Oil price fell on Friday, ending the positive trend
during the first four days of the week, perhaps due to the unexpected news from
the Eurozone that the latter has slipped into double-dip recession; the block
has entered the second recession in less than a year, the data confirmed.
Europe is still reeling from the third lockdown and
it has taken its toll on the consumer spending. Since the block could not get
its vaccine strategy right at the end of the second wave, there were steep
spikes in infections throughout the block; with the third lockdown that lasted
a few weeks unlike the previous lockdown, however, France, Italy and even
Germany appeared to have controlled the spread of the epidemic.
By contrast, both the US and China recorded
impressive growth figures that boosted the confidence of the investors; they
were 6.4% and 18.3% respectively.
With the news of these figures, the crude oil
markets ignored the plight of world’s two major crude oil consumers – India and
Japan; oil price went up when the factors to the contrary were ripe.
Despite the setback, the Eurozone shows the sign of
a collective recovery: unemployment figures never reached the dreadful numbers
that markets feared; the manufacturing section is booming again.
In this context, economists believe that Europe will
turn things around in the coming months and come out of recession with strong
performance.
When markets see the silver line in the dark clouds,
they will create the conducing atmosphere for the investors to be back in their
game.
