Grim Pandemic Statistics in India and Japan Worry the Crude Oil Markets

 

Covid-19 in India and Japan

The rising Covid-19 infections – and deaths – in both India and Japan have dampened the positive sentiment that we saw at the beginning of the week in crude oil markets.

The fall in crude oil price for the third successive day clearly reflects the anxieties felt by the investors over the state of affairs in the world’s third and fourth largest users of the commodity in the face of the latest challenge.

In India, the latest data as well as the ground realities paint a grim picture: the supply of oxygen has been a critical issue that is vital to saving lives; migrant workers from relatively poor states are on the move back to their villages in large numbers, which creates its own logistical challenge; crematoriums are full and in some parts of the country funeral pyres are lit in the open.

Having anticipated the catastrophic impact on the economy that just showed some improvement, the states are reluctant to go into full lockdown; they know all too well how difficult it is to revive – once again, having been in the same situation last year; India experienced the worst economic slowdown in 70 years due to the pandemic last year.

Due to local travel restrictions, people choose to stay indoors and the public transport has been downgraded to essential skeleton services.

The demand of petrol and diesel has clearly gone down and so has the import of crude oil.

Indian government, having launched a fairly successful vaccination rollout, did not anticipate the resurgence of the infection on this scale; judging by what happened last year in the world’s second most populous nation, it will take months before normalcy returns.

Up until then, the Indian economy will slide into an inevitable, relatively passive phase with far reaching consequences for those who rely on the lucrative Indian markets – for months to come.

Popular Posts

Wil Iran attack Israel soon? Only time will tell!

Image
  Credit: Google Maps With Iran's threat against Israel in a direct strike, the tension in the Middle East went up a few notches on the scale of uncertainty, as the United States made it clear once again that it would not be a passive observer if a conflict erupts. The rising tension came in the wake of the daring attack carried out by Israeli F-35 fighter jets on the building that was adjacent to the Iranian embassy in Damascus, the Syrian capital. Seven Iranian nationals, along with a few Syrians, died in the attack, two of them were from the elite Iranian IRGC - Republican Guards; they were very high ranking officers. In response to the attack, Ayatollahs Ali Khamenei, the Iranian  supreme leader, said that Israel will be punished in kind, during an Eid message on Wednesday; he did not imply in what form the retaliation could come; nor did he say whether it was imminent, leaving the ambiguity open to interpretation by military and political analysts. The supreme leader, however,
Read more

Will Venezuela manage to extend the period of waiver of sanctions?

Image
  Chart:www.oilfutures.co.uk | Data: OPEC As the 53rd JMCC, Joint Ministerial Monitoring Committee, of the OPEC+ is scheduled to take place on April 3, analysts are looking at every possible scenario that could rise in the aftermath of such a meeting. A consensus has already emerged among them that the OPEC+ would stick to its production quota for each member country. That means the official position of the OPEC+ will maintain the current production cuts as long as necessary, without increasing the production to appease the influential customers.  The cartel wants to stick to the production targets, already agreed upon, in 2024 without unnecessarily worries about the potential consequences.  With the OPEC+ sticking to it guns, without increasing the output, the top consumers of oil turned to Venezuela to buy it on the cheap as the former was given a waiver to increase the production and then sell, provided that free and fair elections will be held before the waiver expires. Venezuela i
Read more

The trend in China's Oil Imports in 2023: the stagnation of the prices is partially explained!

Image
  www.oilfutures.co.uk The data from 2023 clearly shows that China, the world's top importer of crude oil, is a factor that cannot be ignored when it comes to the stability in the crude oil markets. The trendline, based on the crucial crude oil import volumes, shows a gradual, not a steep, decline in line with the fluctuating manufacturing activities. The trendline of China's Purchasing Manager's Index, PMI, followed a similar pattern in 2023. There was a relative surge in crude oil imports in February on account of heavily discounted Russian oil after the war broke out between Ukraine and Russia. Both China and India cashed in on the unbelievable bonanza, defying international pressure, citing the domestic interests.  In August last year, there was a relative increase in the imports: In September, China's PMI, Purchasing Manager's Index that reflects the nation's manufacturing activities remained above the threshold - 50%. Analysts, meanwhile, are awaiting the
Read more

Latest Energy News from EIA