The crude oil price rally continues with occasional
fluctuations which are completely understandable.
The market concerns remain, though: the conflict
between the Palestinians and Israel enter the fifth day with the infrastructure
in the Gaza Strip taking a heavy hit from the aerial bombardments; the loss of
civilian lives on the rise; on the Coronavirus front, even the countries that
we though beat the disease such as Singapore and Taiwan, are reporting new
surges.
As for the former, the peace moves are already
underway despite the rising rhetoric from both sides; in a few days, a
ceasefire will be announced with the mediation of Egypt and perhaps, Qatar, as
the stakes are high for both sides.
As far as the Coronavirus is concerned, it looks
like we have to live with it for the foreseeable future: the vaccine rollout
will certainly bring the death rate down, but not necessarily the rate of infections
due to frequent mutations of the virus to stay a step ahead.
Even in the UK, the rate of infection has gone up
again, deviating from the recent downward trend.
The way countries dealt with the health time bomb
clearly show that it can be contained after a few weeks; of course, during that
period there are deaths of the vulnerable despite the best efforts of the
health authorities.
This is the reason behind the universal growth of
global economies. Since the growth is encouraging so are the demand for crude
oil; this is a factor – quite rightly - that the analysts take into account
while forecasting the future demand.
The policy makers of the OPEC+ too take this into
account when they restored the supply for June for Asia; Saudi Arabia even went
the extra mile by reducing the price for the region.
All in all, the crude oil markets will function in
an atmosphere full of positive sentiments while coexisting with the unavoidable
tentacles of volatility.
