COVID-19 changed global oil markets in Q1 and Q2 of 2020, sending crude oil prices on a jolly ride and disrupting global energy supply chains and oil traders.
Crude Oil began 2020 trading higher than $60 a barrel. Then came in COVID-19 the worst pandemic known to man, shutting down global demand for energy that the price of crude plunged below $0 for the first time in history. In Oil futures, contracts also went parabolic in late April due to a lack of available storage tanks to store crude oil thereby depressing the price of crude oil.
Though within several days crude oil prices rebounded, ending the first half of the year at $40 per barrel.
Crude Oil prices have rebounded in recent weeks with drivers returning to roads and suppliers curtailing production.
Behind the recent surge is the return of energy demand among major economies, as to loosen economic restriction and record production cuts by OPEC, allies including Russia.
As a result of these, there were many oil futures contracts outstanding to have oil delivered several months to the future date a rare market condition that has calmed oil traders ‘anxiety after April’s chaos.
America’s crude oil production also stuttered as energy companies were forced to close their productive wells, trend oil traders say could most certainly alter the shale boom that made the United States the world’s largest producer of gas and oil.
“However, rising cases of COVID-19 in some US states could keep oil prices in check and will most definitely temporary overly zealous bullish ambitions.
“From a trader’s perspective, there is always a concern when the data is too good; especially beneath the fog of the current Covid-19 headlines that suggest de-risking playbooks remain in play ahead of the US long weekend said Stephen Innes, Chief Global Market Strategist at AxiCorp.
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This article was originally posted on FX Empire
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