The price of oil recovers after yesterday's heavy losses. Mirage or trend?
The price of oil registered slight rises this morning after the sharp falls it opened the week with due to the increase in mobility restrictions to face the new uncontrolled wave of Covid-19. Brent futures, the benchmark in Europe, rose 0.5% at 10:30 (CET) and again reached 41 dollars a barrel. US WTI crude futures rose around 0.6% at the same time, to $38.83.
Source: Admiral Markets MetaTrader 5. WTI Futures CFD Daily Chart (December). Data range: from January 30, 2020, to October 27, 2020. Prepared on October 27, 2020, at 11 a.m. Keep in mind that past returns do not guarantee future returns.
It is not yet clear that these increases represent a change in trend since yesterday's falls, of around 3%, reflect the growing concern about the fall in demand while supply increases. Precisely, yesterday the Libyan national oil company announced that it is resuming production and that all its facilities are now operational.
Meanwhile, US crude stocks are increasing, according to the latest data from the US Department of Energy. On the other hand, the Trump administration has announced new sanctions on the Iranian oil sector and, in particular, the Iranian minister of Oil, Biyan Zanganeh.
In this context, the Organization of the Petroleum Exporting Countries (OPEC) has already indicated that any market recovery could take longer than expected due to the increase in infections throughout the world's major economies.
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