Pessimism around the recovery in demand slows the rising oil rally
Pessimism once again weighs on the price of oil after both OPEC and the International Energy Agency have warned that demand will not recover quickly in 2021, despite advances in vaccines against Covid-19.
OPEC has noted in its latest report that world oil demand in 2020 has fallen by 10% compared to the previous year and has slightly cut its recovery forecast for 2021, so it's likely to delay its intention to increase production from January.
For its part, the International Energy Agency (IEA) has also cut its forecasts regarding the recovery of demand due to the new restrictions to face the pandemic. In their opinion, advancements of vaccines will not result in a quick rebound in the market and they suspect that demand will not register a significant boost with the evolution of vaccines at least until the second half of 2021.
These more pessimistic forecasts have dampened the euphoria in the oil market after crude prices soared to more than two-month highs on Monday fueled by progress on Pfizer's vaccine.
Source: Admiral Markets MetaTrader 5 Supreme Edition. WTI Futures CFD daily chart. Data range: from December 16, 2019, to November 12, 2020. Prepared on November 12, 2020, at 12:15 p.m. Keep in mind that past returns do not guarantee future returns.
In the last four years, oil has achieved a certain price recovery but for the moment it has not been able to reach or come close to the record prices prior to 2014, when it was between $90 and $100. Now it is struggling to climb beyond $40.
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