InvestorQ : Why are oil prices again on a downward trend in this week?
vaishnavi mhatre made post

Why are oil prices again on a downward trend in this week?

vidhya Laxmi answered.
3 years ago

The North Sea Brent crude oil prices fell below the $40/bbl mark on Wednesday. The price had been hovering around the $40 and $42/bbl mark for quite some time and the 5.5% correction on Wednesday appears to be a decisive move for the commodity.

There appears to be a combination of two factors at play on oil. On the one hand there are the constantly rising cases of COVID across the US and Europe, especially since the fears of the second round of the pandemic has been fanned.

This is raising some serious doubts over the economic recovery under way. Secondly, there is also the worry over rising US stockpiles, which also depressed prices. Global crude oil prices in the North Sea Crude Brent market have been hovering around $40/bbl but Wednesday 5% fall was quite steep.

Most oil traders are concerned that despite the likely supply cuts by the Organization of Petroleum Exporting Countries or OPEC, the weak demand would continue to put pressure on oil prices in the foreseeable future.