Global oil price continued edging higher basing on two main catalyst, the fueling price of fossil fuels and stronger demand as economics activities picks up.
Crude oil WTI futures is trading at $84.38 per barrel inching up by 0.62% as of Monday 14:50 Thailand time. Brent oil rallied above $86 per barrel after Saudi Arabia said OPEC+ should remain cautious in maintaining crude supplies since demand is still under threat by the on-going pandemic.
In an interview on Bloomberg Television Prince Abdulaziz bin Salman, Saudi Arabia’s Energy Minister said “producers should not take the rise in prices for granted”.
Toshitaka Tazawa, an analyst at Fujjitomi Securities told CNBC that “but immediate gains for the WTI’s nearest-term contract may be limited given steepening backwardation. The backwardation comes as later dated contracts are trading at a lower price than current month contract.
Contrary to the current factors fueling the price, traders are also closely eyeing renewed concerns of possible COVID-19 resurgence wave in Russia, China, Germany and U.K. which dampens demand sentiment.
The possibility of another round of wave was further reiterated by German chancellor Angela Merkel’s comment “pandemic is not over yet” along with Federal Reserve chair Jerome Powell saying “he could not rule out another COVID-19 spike this winter”.
According to National Oceanic and Atmospheric Administration (NOAA), the next two week the weather is expected to remain warmer than normal through most of the Mid-West and East Coast.
The rising fuel price although can be handled by developed world without much stress however, big oil importing countries including the Philippines, Thailand, India and Turkey are under dual pressure given weakening currency against the dollar.
The SET Energy Index in its second trading session lost 251.21 points inching down by 1.03% as of 15:25 Thailand time.