Crude oil surges 3 per cent after steepest weekly plunge since mid-April

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Crude oil surges 3 per cent after steepest weekly plunge since mid-April

On Monday, with less than 24 hours remaining of a fiercely contested Presidential Election in the United States, oil regained some of its footings lost last week as a number of upbeat manufacturing data from G20 economies had added to a bullish wing to investors’ optimism.

If truth is to be told, crude oil markets had been weathering heavy pressures over concerns of a pandemic-led demand crunch alongside a supply glut, as a number of European economies had reinstated lockdowns and major oil trading companies had been quoted saying in their Q3, 2020 earnings’ report that a renewed forced business closure measure would lead to an alarming stalemate in the global crude oil markets in a near-term outlook.

Oil gains 3 per cent as upbeat manufacturing data offset pandemic worries

In point of fact, both US WTI (West Texas Intermediate) and Brent crude futures’ prices had opened the week more than 2 per cent lower, however, had sharply bounced back following reveal of a cascade of robust manufacturing PMI (Purchasing Managers’ Index) data in Asia and North America.

On top of that, risk-appetite appeared to have feathered further following reveal of a US Government data that the new factory orders had spiked to a nearly 17 years high, while US manufacturing activities had hit a 2-year trough.

In tandem, better-than-anticipated factory activities in major eurozone economies such as Germany, France and Spain, added to investors’ optimism, however crude oil futures outlook remained gloomy in a near-term outlook amid a second wave of pandemic outbreak that had forced a flurry of European economies to re-incline pandemic restrictions.

Citing statistics, on Monday’s commodity market wrap-up, UK crude futures’ prices scheduled to be expired on November 20 rose 2.7 per cent to settle down the day at $38.97 per barrel, while the US West Texas Intermediate crude oil futures’ prices surged 2.9 per cent to $36.81 a barrel.

Meanwhile, addressing the impacts of November 3 election day in the United States, a BNP Paribas analyst Harry Tchilinguirian said on the day’s commodity market round off, “The concerns over oil supply and demand fundamentals ...

are going to play second fiddle to the U.S. presidential election and to how risk markets will react to the outcome”.