Oil Heads for Third Weekly Rise on Improving Demand Outlook

Trading | 4 months ago


Oil Heads for Third Weekly Rise on Improving Demand Outlook - tradeglobalmarket

With lifting off economic lockdowns and border reopening's, global oil demand is likely to rise in the next two quarters. This was reported on Thursday by Organization of the Petroleum Exporting Countries (OPEC), which is a group of 13 of the world’s major oil-exporting nations.

BCOUSD - Weekly

WTIUSD - Weekly

The OPEC organization expect a strong recovery in global oil demand particularly in the major economies like United States, China and India. “Global economic recovery has been delayed due to the resurgence of COVID-19 infections and renewed lockdowns in key economies, including the Eurozone, Japan and India. Overall, the recovery in global economic growth, and hence oil demand, are expected to gain momentum in the second half”, OPEC said in its recent report.

As a result of this optimistic report, Brent Oil ETF is up by 0.4% at $72.76, near a two-year high. This is the highest close for Brent ETF since May 2019. U.S. West Texas Intermediate (WTI) crude ETF also responded and is trading up by 30 cents, or 0.45%, at $70.27. This is the highest close for WTI ETF since October 2018. The recent economic data reports published by major economies including United States and Germany reported increase in business activities and export orders which implies that economic recovery is speeding up.

Increase in transportation and road traffic in major economies will accelerate the oil and diesel demand. The total demand for oil is expected to reach 99.0 million barrels per day in the next two quarters of 2021. Brent ETF and WTI ETF prices hit a new high this week, supported by expectations of stronger demand in developing economies. Therefore, one must look for buying opportunity in oil ETF.

 

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