Yahoo Finance Crude Oil Traders Await U.S Job Report Amid a Fragile Global Economy
There was a bit of surprise among energy traders yesterday when Brent crude broke its critical resistance price level trading above $45, for the first time since the end of Q1, 2020. The surge in Brent crude came from the drawdown in U.S crude oil stockpiles.
However, the sudden upward move in crude oil prices was capped over growing concerns that Covid-19 caseloads globally is on track to hit 19 million, and looks set to close in on 20 million caseloads if nothing is done soon, in curbing the deadly virus onslaught.
Crude oil traders are aware of the demand risks, on rising crude oil global supply amid this fragile global economy. There seems to be some content major among energy players on the ongoing crude oil market rebalancing.
Although Crude oil traders are still keeping some of their bullish bets on hopes that a new round of stimulus packages, by global central banks, and the continual weakening of the greenback would keep the price of crude oil above key support levels. Commodities prices usually outperform when the greenback value continually weakens.
All eyes are now on U.S job report; Crude oil traders will use this important economic metric to gauge the health of the world’s biggest economy. A flat print from July payrolls data could make a case for the crude bears thus negatively disrupt the short-term bullish run in the oil market.
In addition an impressive July payroll result, would remove the urgency For U.S fiscal officials in rushing towards more stimulus packages .Crude oil traders will still be wary on making long bets in the midterm on strengthening geopolitical risks, amid a blurred economic outlook caused by the ravaging COVID-19 virus.
Looking at the flipside a July payroll plunge will strengthen the case for more bearish bets in play, showing that energy demand in a matter of time will also hit the brick wall, as weakening consumer consumption would raise questions on underlying energy demand in the world’s largest economy.
The resurgence of the COVID-19 pandemic coupled with resumption of some virus control measures around major economic hubs are expected to slow down the global economic recovery in the short term, but could bounce back next month, if the control measures put in place yield desired results.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
