Oil price dips: concerns about Coronavirus infections in Asia worry markets

 

Crude oil price - Monday

The crude oil price fell on Monday despite the emergence of multiple factors to the contrary.

The strong growth figures in the US and China,  the two top global consumers of crude oil were in favour of a rise in demand: China’s crude oil imports rose in direct proportion; in the US, meanwhile, the crude oil stockpiles dropped considerably in the past week, according to the latest figures from the EIA, US Energy Administration.

The ongoing discussions involving Iran and the signatories to the 2015 nuclear deal provided the Middle East with some form of hope for stability; the positive sentiment outweighed the impact on the supply side of the oil equation with the arrival of Iranian oil into the crude oil markets.

Not only did these factors help oil markets minimize the damaging fluctuations, but also to get the price up to a sustainable level.

This week, however, price may see a slight downward trend due to Coronavirus concerns: in Asia it paints a grim picture; India, the world’s third largest consumer,  is back in lockdown and countries such as the Philippines are struggling to cope with the rising infections; in Brazil, it is getting worse by every passing day.

Coronavirus in Asia


The countries that managed to get the strategy of vaccine rollout right have so far escaped unscathed; if it is not complemented by civic responsibilities such as keeping the social distance and wearing a mask in public, the risk of even those countries going into  some form of lockdown is very high.

In short, there is no room for complacency yet.

The unbelievable rush in front of shopping malls to grab bargains is hardly encouraging. Blaming authorities on this sort of behaviour is just a meaningless distraction.  

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