WTI Crude Oil Trades Strong Amid Hopes For Tighter Supply

WTI crude oil is trading bullish at the start of a fresh week over hopes that leading oil producers could tighten supply; however, the gains

WTI Crude Oil Trades Strong Amid Hopes For Tighter Supply

WTI crude oil is trading bullish at the start of a fresh week over hopes that leading oil producers could tighten supply; however, the gains remain limited amid worries about the impact of the rising number of coronavirus cases on economic recovery and oil demand. At the time of writing, WTI crude oil is trading at around $39.85 per barrel.

Over the previous week, US oil prices had gained around 9% supported by expectations of tighter supply even as the number of oil and natural gas rigs operating registered a decline in the US as well as in Canada. Meanwhile, OPEC members Iraq and Kazakhstan agreed to increase their compliance with the deeper supply cuts agreed on by OPEC+ nations, which should help stabilize oil markets even further.

Crude oil prices have come under pressure over the past few days amid a surge in the number of coronavirus cases across the US, China and other countries worldwide. Traders are concerned that this indicates a possible second wave of the pandemic even as economies reopen and work their way towards recovery, which could force governments to reimpose lockdown measures and cause oil demand to fall as a result.

China has reimposed lockdown restrictions across Beijing last week following a spike in new cases while Australia has also implemented movement restrictions once again in Victoria to contain the spread of infections. A repeat of the lockdown can send oil demand lower and exert downward pressure on crude oil prices in the coming weeks.

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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