The ongoing demand uncertainty fails to cloud oil price’s trajectory which managed to open the first trading day of the week with gains.
Commodity analysts noted that the market is showing no signs of a clear trajectory on how prices will play throughout the week.
This is due to the heightened Covid-19 measures in some Asian countries as cases in India continue to surge.
The pandemic situation in the world’s third-largest importer of crude is the same as ever, topping the 300,000 cases on a daily tally.
The usual problems on oxygen and medical supplies shortage remain in play and restrict policymakers from opening the economy earlier than expected.
European crude, Brent, managed to bring home a $0.03 hike to $68.74 a barrel, still close to the psychological resistance of $70.00 a barrel.
Meanwhile, the West Texas Intermediate gained another $0.06 to $65.45 a barrel after an impressive bull run last week.
The two leading benchmarks managed to close Friday with each having a 2.5% weekly gain which is their third consecutive weekly streak so far.
This happened despite the uncertainty brought by the hacking of the Colonial Pipeline’s system which led to the temporary halt of operations.
In the latest update on the attack, the company said that operations are now circulating at a near to normal level.
The hacking of the United States’ most important oil pipeline gave a heavy blow to the overall supply in the country.
It also ignited some panic buying fears among citizens, especially the states affected by the disruption of the supply chain.
Oil Demand in Focus
It is not only the coronavirus nor the Colonial Pipeline hacking that is threatening the overall picture for oil demand.
A catalyst that dismayed analysts on Monday is China’s lukewarm economic indicators. This raised concerns on whether the strong orders from the world’s second-biggest consumer market could still carry through.
In the latest update from the National Bureau of Statistics, the country’s retail sales grew by more than 17% in April.
While this might show a steady recovery of the indicator compared to the same period a year ago, this is a sharp downgrade from March’s 34% hike.
Similarly, industrial output did not behave any better after hiking 9.8%, falling below the preceding month’s 14.1%.
Experts in the field noted that such a slack might indicate that the country’s recovery might be starting to lose steam.
Should this happens, demand for crude oil will be seriously affected.
