Oil price rose on Tuesday and continued well into
the most part on Wednesday, despite the disastrous Coronavirus situation in
India in particular, the world’s third largest importer and the worrying
developments on the same front in the developing world, in general.
The investors have seen a glimmer of hope in the crude
oil markets, having digested the encouraging news both from Europe and the US.
The major US cities have eased lockdowns and so did
some European capitals: it does not mean we are out of the woods yet, though;
the authorities – and the scientists – still want us to exercise caution while
mingling among large crowds.
The virus is still evolving and variants may stay a
step ahead of the existing vaccines; there are no signs to believe that the new
variants are less lethal than what existed in the early part of 2020.
On a positive note, as far as crude oil markets are
concerned, the easing restrictions in Europe and in the US encourage motorists
to get back on roads that will inevitably lead to a spike in demand of oil at
the pumps.
Even in India, the oil prices are continuing to rise
despite the several transport restrictions being in place across several
states.
The investors are keen to know whether the next US
crude oil stock data from the EIA, the US Energy Information Administration, is
going to reflect a spike in the use of petroleum products; the speculation is
that the stocks must have fallen in proportion to the demand by the US
consumers.
It is estimated to be 2.2 million barrels to in the
week to April 30; the most reliable data, however, comes from the EIA; it’s
official.
The weaker dollar, meanwhile, makes the buying more
appealing to those who use other currencies; this has been a contributing
factor to the steady rise in oil price too.
The positive sentiment that sweeps across the crude
oil markets makes the price rise by almost 2%, which is significant, given the
uncertainties that play havoc in the background while casting ominous shadows over
the data charts.
So far, the accelerated vaccine rollout seems to be
the only strategy that can keep the Covid-19 at bay. The United Kingdom, the US
and even China prove that it is an effective way to deal with the crisis.
Australia and New Zealand, meanwhile, proved that
strict timely-lockdown measures do work too in containing the outbreaks.
Boyed by these developments, the traders and
investors in the realm of crude oil believe they can see the light end of the
tunnel in this year.
The absence of a price crash, despite the growing
number of volatilities, is a clear sign that their confidence is not misplaced.
