Crude may see volatile trade this week; Covid situation to remain in focus
Crude oil started on a firm note last week, continuing a trend witnessed in the previous week, but succumbed to profit taking followed by a sharp rebound on Friday.
A spate of negative factors pulled crude oil from March highs. These included the prospect of higher supply from Iran as world leaders intensified negotiations over reviving the nuclear deal, China’s emphasis on measures to curb rising raw material prices and a correction in the US equity market amid worries about monetary policy tightening by the Federal Reserve.
A temporary truce between Israel and Palestine also reduced the risk premium. Adding to it, the count of crude oil rigs in the US rose to a fresh April 2020 high whereas the US Energy Information Administration forecasted higher production from shale resources next month. Demand concerns amid rising corinavirus cases in India and other Asian countries also weighed on prices.
