- WTI Crude hits $33 per barrel after rally.
- Coronavirus infection rate expected to flat line.
- Trump contributes to investor confidence through a tweet.
The oil industry continues to enjoy a strong recovery after a stressful period during which oil prices took a massive hit due to the coronavirus. WTI Crude gained by 3%, allowing it to reach $33 per barrel as investors anticipate a slowdown in coronavirus infection cases. The gains in the industry also trickled down to oil stocks with companies such as ExxonMobil and Chesapeake enjoying strong gains. A tweet from U.S President Donald Trump stating that oil (energy) is back.
The next key price targets for oil prices are $38.16, $33.26, $34.71, and $36.05 if the price trades long above $31.96. However, if it trades short below $31.56, then the key price targets will be expected at $31.36, $30.07, $28.82 and $27.28. the price outlook is currently weak bullish to neutral.
The tweet from POTUS may have provided the extra boost of confidence that investors needed to double down on their oil investments. The rally is also aided by improving demand for commodity, especially with the push for business to resume. Demand for oil has particularly improved in China with the latest reports indicating that oil prices are now at the level that they were before the country imposed lockdown measures to combat the viral threat.
The recovering demand for oil in China is great news for the entire industry, especially considering China is the second-largest oil-consuming country in the world. It is thus contributing significantly to the recovering demand for oil across the world. Despite China’s recovering demand, it is still far off from the level of demand for the commodity that it enjoyed at the same time last year.
Although things are currently looking good, there are still concerns regarding the demand for oil moving forward. This is because there is still no cure for the coronavirus and analysts are concerned about the possibility of another surge in coronavirus infections.
Regardless of the current fears, oil prices are not expected to crash as much as they did in February and March. That crash was largely exasperated by the price wars between Russia and Saudi Arabia, leading to oversupply at lower prices. Fortunately, OPEC managed to resolve the conflict and thus aiding the recovery.