Crude oil price to remain stable, despite the conflict in the Middle East and Covid-19 surges in Asia

 

weekly oil price

The crude oil price rally continues with occasional fluctuations which are completely understandable.

The market concerns remain, though: the conflict between the Palestinians and Israel enter the fifth day with the infrastructure in the Gaza Strip taking a heavy hit from the aerial bombardments; the loss of civilian lives on the rise; on the Coronavirus front, even the countries that we though beat the disease such as Singapore and Taiwan, are reporting new surges.

As for the former, the peace moves are already underway despite the rising rhetoric from both sides; in a few days, a ceasefire will be announced with the mediation of Egypt and perhaps, Qatar, as the stakes are high for both sides.

As far as the Coronavirus is concerned, it looks like we have to live with it for the foreseeable future: the vaccine rollout will certainly bring the death rate down, but not necessarily the rate of infections due to frequent mutations of the virus to stay a step ahead.

Even in the UK, the rate of infection has gone up again, deviating from the recent downward trend.

The way countries dealt with the health time bomb clearly show that it can be contained after a few weeks; of course, during that period there are deaths of the vulnerable despite the best efforts of the health authorities.

This is the reason behind the universal growth of global economies. Since the growth is encouraging so are the demand for crude oil; this is a factor – quite rightly - that the analysts take into account while forecasting the future demand.

The policy makers of the OPEC+ too take this into account when they restored the supply for June for Asia; Saudi Arabia even went the extra mile by reducing the price for the region.

All in all, the crude oil markets will function in an atmosphere full of positive sentiments while coexisting with the unavoidable tentacles of volatility.

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