It’s Friday and which means the Baker-Hughes Rig Depend is out. This week’s determine got here in at 344, up two rigs from final Friday’s numbers.
It’s Friday and which means the Baker-Hughes Rig Depend is out. This week’s determine got here in at 344, up two rigs from final Friday’s numbers. Though the Baker-Hughes report isn’t a significant market mover, it provides us a sign of the place North American manufacturing is at. With WTI trending increased above $65.00, the rise in rigs is no surprise. Nevertheless, the COVID-19 disaster in India is posing main demand-side questions.
Indubitably, COVID-19 has been the one largest crude oil market driver of the previous twenty years. Now, a spike in coronavirus circumstances within the third-largest oil-consuming nation on this planet is threatening to derail values. This assertion from Worth Futures Group senior vitality analyst Phil Flynn sums up the COVID/crude oil scenario:
“When Saudi Arabia reduce their crude promoting worth, it was a stark reminder that there are nonetheless pockets of hazard of COVID that would impression demand.”
Western media protection of the impression of COVID-19 in India has been spotty. Nevertheless, Reuters is reporting that India posted file infections and deaths Thursday, posing main oil demand questions. The end result has been a lid on WTI and Brent crude, each of which have skilled bearish stress over the previous 24-hours.
COVID-19 Fears Ship WTI Under $65.00
For those who’ve learn any of my crude oil updates from the previous 6-months, you then’re conscious of my bullish bias towards WTI. Given the Biden administration’s stance on fracking and a full COVID-19 financial reopen, provides are positioned to shrink as demand comes again on-line. Nevertheless, the most important caveat to my bullish vitality argument is COVID-19. If we see one other world shutdown, then oil costs will definitely crash.
Overview: For now, the COVID-19 scenario in India is among the few objects holding WTI and Brent from revisiting five-year highs. As we transfer into the height demand summer time season, oil costs are resulting from rise ― except we see a set of spring 2020-esque lockdowns.