Oil Bears Take a Grip on Crude Oil Markets
Oil traders are falling short right now as reports of significantly spiked US crude oil inventories tied to President Trump's threat not to sign the long-awaited COVID-19 stimulus agreement recently approved by the US Congress to bring Brent crude prices below the Have pushed down 50 USD / barrel.
At the time of this writing, the America-based West Texas Intermediate oil contract was down more than 1% to $ 46.56 while the London-based Brent crude oil contract was down about 0.9% and at $ 49.62 each Barrel was traded.
Oil bears hit the oil market as both major oil contracts lost nearly 6% in value after their second session in a row. Oil bears sank their claws deeper at today's trading session after recent data from the world's largest economy revealed soft energy demands remain in play.
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Recent data from the American Petroleum Institute showed that reported crude oil inventories rose 2.7 million barrels for the week ended December 18, compared with energy experts' expectations for a 3.2 million barrels decline.
Oil prices are falling after President Trump shook the nerves of oil traders for failing to sign up to the $ 892 billion COVID-19 stimulus package. He wanted US lawmakers to increase the amount for auxiliary controls that US lawmakers approved a few days ago.
Also, COVID-19 cases continued to increase in the world's largest economy. Over a million new cases were reported in less than a week, causing government agencies to discourage their citizens from traveling for Christmas, further depressing energy needs, as air travel and social mobility came under control.
In addition, most parts of Western Europe have restrictions on human mobility, which is causing the fear of energy demand to re-emerge as the decrease in human activity signals a further distortion of the balance between energy demand and supply, meaning that the Brent - Crude oil prices could be below USD 48 / barrel by the end of 2020 if the current situation persists.
If the world's largest economy returns anywhere near the precipice of the COVID-19 lockdown that occurred in March / April, oil bulls could go under for at least two months, not to mention a sharp drop in prices on previous crude oil gains.
Unfortunately, the crude oil price pattern for oil bulls suggests more downward moves, especially as the COVID-19 lockdown headlines take center stage.
In our economic calendar you will find all economic events of today.
This article was originally published on FX Empire
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