Gold and Silver prices started decreasing while base metals traded under pressure on demand raise worries. Commodity prices traded lower on the stronger dollar over U.S. stimulus hopes and boosting virus cases across Europe. Moreover, the dollar ended the session 0.67 percent up for the week at 93.68 against major currencies. However, it has to be mentioned that crude oil prices were an exception, as it ended in green for the week.
Remarkably, Benchmark NYMEX WTI crude oil prices boosted 0.69% and settled at $40.77 per barrel on Friday. Crude oil prices traded firm during the week on recovered demand prospects from China and India. On Thursday, the bullish weekly inventory data helped oil prices to gain on Friday.
Besides, at Multi Commodity Exchange, crude oil October futures increased by more than 1%. It touched Rs 2,995 per barrel, helped by high global oil prices and a weaker rupee.
Moreover, crude oil prices were traded in a range of $37-42 per barrel since the previous few months over mixed fundamentals. Oil prices have increased on slower demand rebound amid coronavirus pandemic effects and oversupply scenario.
Besides, Global crude oil inventories have expanded over lockdown effects and shutdown in economic activities during the last two quarters. The return of supply from Libya and Iraq, which are not part of the output quota, may keep the medium-term oil market flooded. The oil production from Libya has touched 5,00,000 barrels per day.
OPEC plus nations have signaled to decrease oil output cut quota by 2 million barrels per day from the current limit of 7.7 million barrels per day. OPEC plus nations have called for strict compliance to output quota to balance the oil market.
Virus infections in Europe may impact crude oil prices in 2021
According to the analysts, the higher supplies and gain in the second wave of virus infections in Europe and other parts of the world without vaccine hopes may impact crude oil prices in 2021.
Additionally, the U.S. CFTC data showed that money managers decreased their net long positions to a five-week low by 9062 lots last week. The oil and gas rigs operating in the Gulf of Mexico were up by 13 to 282. Meanwhile, oil rigs grew by 12 to 205 last week.
Crude oil prices are expected to trade in a current range with bullish bias in the following week with near-term resistance at $41.50 per barrel. A break up $41.50 may lead costs towards $43 per barrel. The downside is expected to be capped at $37, as it is a powerful support zone.