Crude oil price that has been rising steadily for
weeks failed to creep into all-important $70 territory defying the expectations
of the analysts.
There are concerns about a sluggish increase in
demand despite the impact of the pandemic being on the wane and vaccination
campaigns in full swing across the world.
The anticipation of yet another US crude inventory
build-up and an unexpected decline in the US rig count may have affected the
enthusiasm of the investors.
Moreover, some countries in Europe, Africa and in
South America show anxiety over a potential third wave of the pandemic with
certain variants of the Coronavirus; Italy, Kenya and Brazil are some countries
that try to keep the threat of yet another wave of the pandemic at bay.
Although some analysts believed that there would be
a spike in oil price when the US announced its latest stimulus package, its
effect died down much faster than they thought it would.
OPEC+ must be watching the trend carefully, because
they did not want to flood the markets with excess oil. If the price of crude
oil does not go beyond $70, they may stubbornly stick to the same formula that
they agreed on in March.
Saudi Arabia has been asking the members to be
vigilant and it wants to exercise caution before changing the status quo for
months. Saudi Arabia has every right to feel elated for getting the price strategy
right in the middle of market chaos during the past few months.
Next week, all eyes will be on the factors that
usually help build the momentum of the rise in price; the oil rig count and the
US crude oil inventories, for that matter, will be under intense spotlight in
the coming days.
