Brent crude added 0.7% on Monday, ending the trading session at $ 50.31 per barrel. As in the past, prices were supported by hopes that widespread adoption of the coronavirus vaccine will help the global economy return to previous economic activity. However, while the distribution of COVID-19 vaccines has improved market sentiment, it could take a long time for demand to recover to pre-viral levels.
Another geopolitical force majeure in the Middle East was also a factor in the rise in energy prices. It is about an attack on an oil tanker off the coast of Saudi Arabia. At the time of the incident, the vessel, owned by the Singaporean company Hafnia, was anchored at the fuel terminal in the port of Jeddah. The Saudi Arabian Ministry of Energy said the attack on the tanker is an attack not only on the kingdom itself, but also on the security and stability of energy supplies around the world. It should be noted that since the terrorist attack did not damage the port infrastructure and supplies continued at the same volume, market participants quickly lost interest in this event.
Today, oil quotes have moved to a decline, which was facilitated by the deteriorated OPEC forecast for global oil demand in 2021. According to the cartel's monthly report, global oil demand will only show a partial recovery from a record drop during the coronavirus pandemic. OPEC predicts that global oil consumption will average 97.3 million barrels per day in the 4th quarter of 2021, up from over 100 million barrels per day in 2019. The organization points to uncertainty about the long-term impact of the pandemic on global industry and human mobility.
Oil market experts recommend that traders remain cautious not only against the backdrop of an obvious drop in energy demand, but also in view of the continuing growth in oil production. As a reminder, the OPEC + countries have agreed to increase production by a total of 500,000 barrels per day starting in January. Given the above, "short" positions on Brent crude oil remain a priority.
Brent SellStop 49.40 TP 46.00 SL 50.50
Analytical reviews and comments to them reflect the subjective opinion of the authors and are not a recommendation for trading. Author Artem Deev is a trader analyst at AMarkets . Social network of Forex traders is not responsible for possible losses in case of using the review materials
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