The global oil market lost about one-fifth of its value in 2020. Meanwhile, government-adopted coronavirus pandemics and restrictions to curb stimulus measures have further crippled the world economy. Crude oil prices plummeted to the lowest level.
On the last trading day of 2020, Brent crude fell 25 cents (0.5%) and traded at $ 51.38 a barrel. West Texas Intermediate fell 0.2%, or 11 cents, to trade at $ 48. However, it attracted buyers after the release of inventory data in the United States, which did not show a clear trend.
Oil prices have fallen to their lowest levels since the beginning of the year. WTI’s first negative rate in April shocked investors around the world. However, the price of black gold has more than doubled since the 10-year lows in April.
Does crude oil still look bullish?
The dollar fell on Thursday and ended in 2020 as investors pushed the global economy into more risky assets.
Analysts believe that most of what we see in the market is characterized by the collapse of the US dollar.They believe this will last for a long time as new stimuli are being injected America.. Therefore, the market may not reflect a significant increase in demand, but rather a particular upward bias due to a variety of other factors.
When it comes to Brent crude, analysts believe prices should begin to reflect a lack of demand. This leads to thinking that it will be difficult to exceed $ 55, at least for now. At a basic level, the injection of fiscal stimulus in the US will give momentum to the market while lowering the US dollar. However, the important thing is to continue the momentum.
In the short term, worrying about coronavirus holidays can increase profits.
New strains of the UK virus are pushing limits, damaging short-term demand and pushing up prices. On the other hand, hospitalizations and infectious diseases are increasing in parts of Europe and Africa.
In terms of supply, a US energy company added three oil and gas rigs this week.
At the January 4th meeting, OPEC Plus is expected to increase production to 500,000 barrels per day. OPEC producers appear optimistic about the 2021 recovery in demand. But they believe this action is not immediate and that oil market improvements will be gradual, taking more than six months.
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Oil prices fell 20% in 2020
https://www.financebrokerage.com/oil-prices-dropped-20-in-2020/ Oil prices fell 20% in 2020