Even though some Oil prices edged lower today, overall, the commodity maintained its upward momentum for the seventh week in a row.
Oil Futures fell to approximately $48 a barrel as the USD rose, making commodities priced in it less attractive. Other oil products also saw declines recently seen by West Texas Intermediate (WTI), which fell 0.3% a barrel and Brent by 0.4%.
Opposingly, Crude climbed to its highest levels in almost 10 months. Many believe this is due to the enthusiasm that once a vaccine is widely administered, it will instigate a sustained recovery in fuel consumption. Also, Asia’s physical market has seen a strong demand, which has contributed to the driving of prices for Russian, Middle Eastern, and U.S. barrels. Indian refineries are running at full tilt as well, although there are signs of softening demand, especially in South Korea, as the virus sees stages of a comeback.
This rising trend is partially due to stimulus deals being finalized, one that may boost near-term demand ahead of the rollout of a COVID-19 vaccine, especially in the USA. The stimulus package will be worth almost 900 billion dollars with the hopes that the U.S. will distribute the first wave of vaccinations this week.
Despite all this, the market still faces several hurdles, including additional supplies from OPEC along with resurgent virus cases. All this has impacted demand, but some experts believe this hit is smaller than earlier in the year. Overall, the oil market is likely to remain range-bound and choppy, with producers taking advantage of prices edging higher due to vaccine enthusiasm potential tightening of pandemic restrictions.