Oil market outlook: bumpy ride ahead?
Oil market outlook: bumpy ride ahead?
2020 has been disastrous for the oil markets, however, it appears that oil has recovered most of its losses and is now hovering near pre-pandemic levels. In today’s article we will take a look at oil’s recent performance and explore the opportunities that may lie ahead.
January isn’t even out yet and 2021 is already looking much brighter than its predecessor and especially for oil that was devastated by the global lockdowns before literally collapsing overnight.
Vaccines are rolling out, the markets are cheering and the outlook is generally brighter across the board. In fact, crude oil has rallied by more than 11% since the beginning of the month.
It may be too soon to tell if the market is completely out of the woods, however, with most signs – so far – pointing towards the upside, we may see the oil market’s newfound strength continue well into the New Year.
Demand outlook
All commodity markets are particularly sensitive to supply and demand shocks and oil’s response to the pandemic, as dramatic as it were, was largely expected.
However, it was also expected that as soon as demand picked up – with the coming of the New Year and the exceedingly promising reports on the efficacy of the leading vaccine candidates – we would see a miraculous recovery.
