Oil price stunts behind the firming US Dollar along with demand woes coming into play.
In the latest foreign exchange charts, the greenback is still at the 91-point threshold. It did however, manage to gain during the day.
Analysts’ projection is also not helping the black gold after forecasting a 94-point near-term target for the DXY.
This bullish USD forecast also sent gold prices lower as the two safe havens move in inverse proportions against each other lately.
With this update, Brent crude slashed $0.17 a barrel but is still trading strongly above the $66.00 per barrel threshold.
The West Texas Intermediate followed suit and gave up $0.10 a barrel, sending the trade price to settle at $63.03.
Last week, both benchmarks recorded their timely boost, amounting to 6% each.
This sent the American contract to surge past the critical $60.00 psychological resistance-support level after resting at $59.00 per barrel for many days.
Meanwhile, analysts are now concerned about the future of demand, on whether resilience could carry through for so long.
India is again battling a surging number of daily infections, which came at nearly 300,000 on Monday.
The covid-related mortality rate in the country has also risen to 1,619 during the same day.
This sent the total to over 15 million infections, occupying the second spot in the country with the most number of infections, next to the United States.
With its billions of consumers, the dire situation in the South Asian country suggests some hurdles on crude oil demand recovery.
OPEC: Recovery not Expected Until Q3
Vaccination has been on a roll since the start of the year, but the virus is still spreading faster. This urges countries to ramp up their actions to curb the spread of the virus.
With the persisting pandemic, OPEC said that recovery might likely come in the third quarter of the year.
The timeframe could further stretch up until the fourth quarter if countries do not bolden their vaccination progress.
In the past month, many European countries, which as big oil consumers, declared another round of mobility restrictions.
This is expected to result in a heavy toll in second-quarter demand, which could have been a starting point for a steady recovery.
The oil association continues to bring support to prevent crude oil from falling to record low levels again.
On the other hand, analysts noted that the hike in prices should be demand-driven and not merely coming from the supply side.