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