WTI was observed to be trading between a narrow $42.26 and $42.86 price range – as traders assess the impact of the two tropical storms hitting the US Gulf Coast which account for 45% of US oil processing capacity. One of the storms is showing signs of weakening, but the other is showing signs of strengthening into a hurricane.
According to BBC, ‘both storms have already wrecked havoc in the Caribbean, destroying homes and killing at least 12 people’.
A disaster declaration has already been issued by President Trump in the state of Louisiana, where one of the storms (Marco) is forecasted to bring dangerous winds and rain to.
In terms of Coronavirus cases, countries such as Japan, South Korea, Italy, France, and Germany are showing worrying trends in terms of resurgence which could impact the demand and price of oil.
While we know that the demand for crude oil will one day return to its pre pandemic level, the real money question is always WHEN.
Even as the outcome of the OPEC+ meeting also leaves us with a hint of uncertainty as to when that time will come, the prudent thing to do is to stay calm, study the trends and strike when the iron gets hot!
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