Oil Price Fundamental Daily Forecast – Traders Appear to be Shrugging Off Second -Wave COVID-19 Concerns

US West Texas Intermediate and international benchmark Brent crude futures rose mid-session on Thursday after having troubled, bilateral trading at the beginning of the session. Although traders are trending up this week, gains have been limited by rising crude stocks and an increase in new coronavirus cases. In the meantime, a slight increase in demand for refinery products is helping to support prices.
At 16:26 GMT, August WTI crude is trading at $ 38.96, an increase of $ 0.75 or + 1.99%, and August Brent crude at $ 41.42, an increase of $ 0.71 or + 1.74%.
Growing concerns about global demand
Concerns about fuel demand are helping to curtail profits this week after an increase in coronavirus cases in Beijing and the United States threatened to block parts of the economy. In China, for example, the government closed schools and canceled flights. In the United States, government officials in Texas, Florida, and California are rethinking restrictions on bars and restaurants.
Mixed EIA report raises hopes for bulls
This week's Energy Information Administration (EIA) inventory report provided the bulls with a sunbeam after gasoline and distillate stocks dropped unexpectedly. In addition, crude oil production has now dropped to 10.5 million barrels a day as oil producers cut production further.
OPEC holds online meeting
OPEC and its allies held an online meeting on Thursday to discuss the future record-breaking 9.7 million barrels a day (bpd).
It was unlikely that Thursday's discussion would recommend extending the record cuts until August. Compliance with the production cut commitments by OPEC + was 87% in May, two OPEC + sources said on Wednesday.
Crude oil exports from Saudi Arabia rose to 10.237 million barrels a day in April - JODI
Saudi Arabia's crude oil exports rose from 7.391 million barrels a day in March to 10.237 million barrels a day (bpd) in April, official data showed on Thursday.
In April, the 13-member organization of the oil-exporting countries pumped an average of 30.25 million barrels per day (bpd), an increase of 1.61 million bpd compared to a revised March figure, according to a Reuters survey released this month.
Short-term outlook
It looks like retailers are assessing the real possibility that an increase in COVID-19 cases will not be as bad as the first wave of infections. The price action suggests that traders do not believe that widespread standstills will occur and that the economy will only leave this phase behind.
The key is the gasoline and distillate numbers. If inventory levels continue to drop, it indicates that people are driving, truckers are on the move, and airlines are reopening their routes.
In our economic calendar you will find all of today's economic events.
This article was originally published on FX Empire
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