WTI Crude Oil Bearish - Iranian Crude Exports' Resumption, Asia's COVID-19 Wave in Focus

WTI Crude Oil Bearish – Iranian Crude Exports’ Resumption, Asia’s COVID-19 Wave in Focus

Posted Friday, May 21, 2021 by
Aiswarya Gopan • 1 min read

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WTI crude oil prices are on the rise in early trading on Friday, reversing the three-day bearish streak as markets await Iranian crude exports to resume and boost supply even as demand remains under pressure owing to the ongoing coronavirus crisis. At the time of writing, WTI crude oil is trading at around $62.56 per barrel.

Despite the current bullish mood, WTI oil is set to post a loss of almost 5% so far for this week – the biggest weekly loss in two months. The sentiment among oil traders soured after news reports about the US and Iran making progress on their talks about the nuclear deal, which could help ease sanctions and revive Iranian oil supply in international markets. Although discussions remain ongoing, they are progressing in a positive direction and if the negotiations end successfully, global oil supply could be boosted by 1 million bpd towards H2 2021.

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Meanwhile, losses in crude oil are somewhat limited by an optimistic mood among traders over expectations of a strong pick-up in fuel demand in the summer. Markets remain hopeful that the rapid rollout of the COVID-19 vaccines across the US and Europe could boost oil demand as travel and consumption levels among consumers improve during the peak holiday season this year.

Although, even as markets look forward to improvement in fuel demand across the West, worries about the resurgence in coronavirus infections across Asian countries are exerting downward pressure on the sentiment. Leading oil consumers India and Japan are in the throes of the latest wave of the pandemic and have imposed restrictions that are hurting economic activity, even as other Asian nations like Taiwan, Thailand, Cambodia and Singapore also bring back restrictions amid the sudden spike in fresh cases.

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