The price of oil slipped further from its highest level. This situation happened on Sunday. It means that the commodity ended its rally which was started on the end of October because of the strong production and request reduction from China.
Basically, the condition which is happened nowadays makes a lot of people questioning. It is especially about the market prospect due to the case of coronavirus that rises. Based on the data, some prices changed, and mostly are decreased.
The Brent raw oil declines by 20 cents or by about 0.4%. It becomes $54,90 / barrel after it slipped 2.3% last Friday. On the other side, the United States oil is also slipped by 13 cents or 0.3%. Now that is becoming 52.23 per barrel.
The Volatile Prices of Oil
The oil strengthening is supported by the COVID-19 vaccines which are released. Furthermore, the surprising decline of raw commodity production by Saudi Arabia as the largest oil exporter in the world is also becoming the cause. That really makes sense.
However, the new infection cases all over the world are worse right now. More and more people are getting infected right now. Meanwhile, a new variant of the virus is also reported. This condition triggers a worry about how long demand will be survived.
RSI or the Relative Strength Indexes based on both contracts located in the overbought area shows a correction in a journey. That thing was explained by a senior market analyst named Jeffrey Halley. The price is now corrected.
Based on the information, the prices are now declined again. That happened from the beginning of a session after the data from China showed the economic condition of the largest oil exporter in the world. It speeds up the economy because of the pandemic.
Pressure from The US Drillers
The US drillers also add pressure. That happened last week. They placed more oil rigs and also the natural gasses to work for about eight weeks in a row. Why? The cause is the rising price that causes the production is looked more profitable than before.
However, you can note that the amount of the rig operated is only half of the total amount last year level. The drillers have been indicated that they will continue to maintain their expenses in the future. It was reported by research from ANZ.
Furthermore, the economical condition also supports the increase of those drills. Almost half of the industry is still not that economic. The news also comes from the shale companies. They respond to that market increase quickly in these last years.
They win the market because Saudi Arabia and other main producers such as Russia have been cutting the production. That is an effort to support the price of oil and global gas. Many analysts thought that this condition is not final yet. It may changes again.
How a Company Capitalizing on Market Advantages
The United States companies are also capitalizing on market advantages. They did it by locking prices for future sales. That was informed by a trusted source who knows about that issue clearly. He said it to Reuters at the end of last week.
In Chine, the infection of the COVID-19 virus has been increasing. Now, more than 28 million people there are isolated. Beijing is an area that tries to stay away from the virus. You know that China is a country where this coronavirus is firstly found.
Elsewhere, several countries are started to inject the vaccine into their people. The most common products which are used are Pfizer, Sinovac, BioNtech, and many more again. Basically, they show different efficacy in several countries worldwide.
