Crude Oil prices plunged heavily on Friday morning adding to more losses recorded from last trading session amidst growing concerns that renewed induced COVID-19 lockdowns following a rise in COVID-19 cases globally could weaken energy demand.
Brent crude was down 1.49%to trade at $41.72 a barrel by 0646 GMT after losing more than 2% yesterday U.S. oil also lost about 1.72%, to trade at $38.92 a barrel after plunging about 3% in the last trading session.
Brent crude seems more likely to record a weekly decline of about 2% and the West Texas Intermediate for a drop of more than 3%.
COVID-19 has been the major suppressing factor capping the price of Crude oil lately and continued to be the major macro determinant for the energy product in the foreseeable future.
As leading industries around the world resume lockdowns, products and services would be limited, demand for certain goods plummet especially those not falling under the necessity category, meaning consumer behavior is expected to change globally in the short and mid-term thereby affecting the need for energy goods in driving such global economic parameters.
In addition, while many energy analysts were expecting global economies and energy demand to bounce back from the COVID-19 pandemic, the present rise in daily cases around many parts of the world including the world’s largest economy and biggest consumer for crude oil (United States)strengthened concerns among oil traders and energy stakeholders about the pace of any economic recovery.
Economically COVID-19 has not mattered this much until Q3 2020, this is because global central banks stimulus packages seem to be waning down and the energy markets are still on a fragile footing, with the most precedence oil production cut by major oil producers implemented yet warnings from the U.S Fed Reserve officials that the recovery remains uncertain, shows that an immediate, innovative economic strategies are needed to save the world’s fragile economy from the abyss.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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