The oil prices felt for more than 7% on Thursday. It was the worst decline in a day since June. The crude oil price in the United States is now under $60 per barrel amidst the jump of the COVID-19 new cases in Europe and the continuous challenge for that block.
It is related to the virus vaccination. The West Texas Intermediate sold in New York as the reference for the crude oil declined by $7.1% in $60 per barrel. Before, it was felt to $59.48 and became the lowest level since the third of March.
That was the sharpest decline in one day for WTI since 11 of June. Brent which was sold in London became the reference for the crude oil. That declined by $4.72 in $63.28. Based on the data, there are so many aspects which are influenced in that situation.
The Increasing Case of Coronavirus
The price of crude oil felt off because the case of the coronavirus confirmed in Germany was increased by more than 17000. That became the biggest daily increase since 22 of January. It is based on the release from the Robert Koch Institute so far.
The increasing European cases and more lockdown decisions due to the pandemic show that the third wave of the pandemic is now developing in that block. That is happened behind the slow vaccination program. What other case that weight on oil?
It is the prediction from the International Energy Institution. They said that it needs more than two years to make the global oil reaches its pre-pandemic level. The data from the US Government shows the four in a row weekly increase for the domestic stock.
That creates the market’s worry. The sentiment is also weaker after a decision from India as the third largest oil importer after the United States and China. To cut the purchase from Saudi Arabia for about the quarter from May after Riyadh refused a thing.
The Production of Oil Globally
For your information, Riyadh refused to let the OPEC+ alliance and oil that it is controlled. That thing increases the production. New Delhi also needs more stocks of oil in a lower price as well. That is needed to low down the price of pump that they face.
The pump price has been increasing by almost a year. Iran has been refusing the US decision for to explore the raw oil to China with the huge discount, break the OPEC+ cut, that Islamic Republic may reach a deal with India as well in the future.
Meanwhile, the GBP/USD may will set back their focus to the England fundamental with the main data release on Friday. That pair is continue to increase after starting a low session in 1.3900 on Thursday and close the FX sales under the level of 1.4000.
It means that GBP/USD experienced the 0.5% rally or about 70 pips. The solid session Thursday showed that the GBP has been increasing to the third level in the G10 performance table this week. It rose to 1.1% this week against the US dollar.
The Impact of Dollar Weakening for GBP/USD
The dollar weakening is the main power to push GBP/USD higher. The American dollar as a safe-haven weakened as the impact of the risk bias which is so strong for the sales. Most of the news from the Great Britain have been ignored. However, there is one thing to note.
Based on the FT report, the England Ministers reported to want to change the capital market rules. That is an effort to solve the worry that London will lose its attraction as a financial center globally. The ministers want an aim for the bank.
They want the bank to be able to put their capital easily, cancel the Mifid II, and plan the wide check from the company finance market. There is a potential view to throw away the UE standard. The different UE regulation may be so slow.
