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Oil Prices Start Q4 up, Hurricane Delta Disrupts America’s Energy Hub

Adesina Olumide
·2 mins read

Oil bulls took control relatively as Hurricane Delta disrupted America’s energy hub, taking , validating with data further revealed crude oil production in the Gulf of Mexico plummeted by 1.69 million barrels or 92% of the energy hub’s daily output as a result of offshore oil platforms remaining closed after the dreadful storm tore through the region.

Crude oil traders are taking such squeeze in supplies bullish, as crude oil demand/supply rebalancing remains the key indicator, traders and oil players are taking into consideration in 2020, amid fragile demand as the COVID-19 virus onslaughts weigh its ugly head on the global economy.

That said, it becomes unsurprising to see crude oil prices still down about 36% in 2020.

OPEC+ including Russia is scheduled to meet on November 30-December 1, 2020 to know how it has fared on supporting the black viscous liquid hydrocarbon.

Led by the respected Oil cartel’s sheriff, Abdulaziz bin Salman had some time ago issued stern statements targeted at oil speculators who question the oil cartel’s resolve in boosting crude oil prices, to stay out, as he was ready to keep them out of business, such unusual warning from such high-level channel, shows how committed the Saudis are, on the macro level to keep price supported by using all its ammunition at its disposal in keeping to such goal.

So it shows why oil traders have such bias that crude oil prices are unlikely to trade at prices seen in April, keeping oil bears in check.

On the price pattern it’s very likely that COVID-19 disruption is now fully priced into the fragile energy market, as oil prices in the case of Brent crude ranged between $40-$45/Barrel, taking into account prices it traded at in Q2, Q3.

Analysts largely concur that oil prices are not expected to move much higher than current levels of around $40 a barrel until the rest of 2020, but neither are they likely as they did in the past as almost all negative factors seem to be priced in.

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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