Crude Oil Price Forecast Eyes OPEC Output Restart, China and US Demand

Crude-Oil

CRUDE OIL TECHNICAL OUTLOOK – NEUTRAL

  • All the eyes turn to the USA employment report that might boost market sentiments.
  • China and US oil demand, making a recovery, OPEC raises the output next
  • The prices of crude oil might get exposed to the competing technical forces
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The prices of crude oil might struggle to find more uptrend momentum ahead since the commodity might be further exposed to competing for technical forces. WTI has slowly recovered from April’s bottom as nations across the globe have gradually eased the lockdown restrictions that had been imposed to contain the COVID-19 outbreak. This has helped to nudge demand up for the commodity.

China and the United States, which are the biggest economies around the world, have seen the demand for crude oil increase after finding the bottom throughout the peak of the COVID-19 outbreak. The consumption of oil seems to recover quickly from china as the USA contends with the rise in COVID 19 cases and fatalities of late. In essence, these two economic giants have without a doubt aided to further boost the oil prices as AUD Might Fall Further on USA-CHINA Tension Fears, Crude Oil Awaits OPEC Meeting.

About the Energy Information Administration (EIA), China, and the United States account for approximately 34% of global consumption of oil back in 2017. About 20% of this was from the United States.

If the cases of COVID-19 and deaths continue rising, the result will be more strict lockdown restrictions. This will without a doubt reverse the progress in the restoration of the oil demand back to pre-coronavirus levels. This might weigh very heavily in the short term.

OPEC SLOWLY RESTORING OIL OUTPUT

Essentially, the Organization of the Petroleum Exporting Countries is currently making plans to reverse the output cuts that had been initiated earlier this year as we head into August. Also, as reported by Bloomberg. The OPEC alliance took about 10% of the world’s oil supply in early 2020. Now, this new month, OPEC and other external partners expect to restart about 1.5 million barrels output in September.

ALL EYES ON THE UNITED STATES JOBS REPORT

This might keep the prices under intense pressure with the financial markets awaiting the USA jobs report early this week. Overall, data from the world’s biggest economy continue to extensively outperform relative to the expectations of the economy. Higher than expected job gains might boost any expectations of future growth, particularly with the central bank not taking it seriously enough to raise the interest rates or unwind the balance sheet.

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