Crude Oil prices closed at 59.60 after placing a high of 59.93 and a low of 58.82. Crude oil continued its bullish streak for the third consecutive session; however, it remained consolidated throughout Thursday as short-term coronavirus pressure increased and a jump in US gasoline stocks reported by EIA. The world’s third-largest oil importer, India, reported a fresh record of daily new coronavirus cases on Thursday that forced its government to announce lockdown in its biggest city, Mumbai, a week earlier than anticipated. This lockdown potentially threatened the country’s fuel demand and crude oil imports that exerted a negative impression on WTI crude oil prices; hence, prices remained under consolidation for the day.
The rising number of coronavirus cases was also reported from other parts of the world. Canada’s province Ontario also imposed a month-long lockdown on Thursday, closed all non-essential retailers, and issued a stay-at-home order. Furthermore, on Thursday, the governor of a major importer of crude oil, Japan, said that she would ask the Japanese government to consider new stricter emergency measures amid a new wave of coronavirus that was causing an increased daily occurrence of infections. All these lockdown and restriction measures worldwide imposed a negative outlook of the fuel demand that kept the oil prices flat on Thursday.
Meanwhile, Malaysia and Brunei have recently signed an agreement to develop two offshore oil fields on the maritime boundary, with greater exploration of ultra-deepwater discoveries. Both governments’ unitization agreement to develop the Gumusut-Kakap and Geronggong Jagus East offshore oil fields also supported the oil prices.
On the data front, at 17:30 GMT, the Unemployment Claims from last week raised to 744K against the forecast 682K and weighed on the US dollar that added in the upward momentum in crude oil prices. At 19:30 GMT, the Natural Gas Storage in the US remained flat with the expectations of 20B but rose in comparison to the previous 14B.
The US Dollar remained weak on Thursday amid the poor report about the jobless claims and dropped against the six major currencies basket. The US Dollar Index fell to its two-week lowest level and followed the declining US Treasury yields that ultimately helped crude oil prices and pushed them higher. Good luck!
// Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst.
Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D.
Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.