Commodity Market: US Crude Oil snaps three-day winning streak as IEA says quick demand recovery not likely

Futures on US West Texas Intermediate Crude Oil looked set to snap a three-day streak of gains on Thursday, after the International Energy Agency said a quick recovery in oil demand was not likely amid rising new COVID-19 cases across Europe and the United States.

New social restrictions have already been imposed across Europe, while bars and restaurants in New York have been ordered to close early.

Earlier this week, both oil benchmarks rose, drawing support from reports that Pfizer Inc’s experimental vaccine had proven to be more than 90% effective against the COVID-19 disease, based on initial trial results.

Still, the International Energy Agency (IEA) said on Thursday that global oil demand would probably not receive a meaningful support from the vaccine roll-out until later in 2021.

“The vaccine-related rotation has quickly faded as investors have realized that the pandemic won’t disappear as fast as it arrived,” Hussein Sayed, chief market strategist at FXTM, said.

“While the vaccine remains the best news received since the virus spread, life won’t return to normal in a matter of days or weeks.”

Yesterday the Organization of the Petroleum Exporting Countries also revised down its oil demand forecast, as it now expects a slower rebound in global demand in 2021 than previously anticipated due to accelerating pandemic.

As of 10:41 GMT on Thursday WTI Crude Oil Futures were edging down 0.12% to trade at $41.40 per barrel, while easing from Wednesday’s more than two-month high of $43.06 per barrel. WTI Crude Oil Futures have risen 15.67% so far in November, following an 11.01% slump in October.

Brent Oil Futures were edging down 0.14% on the day to trade at $43.68 per barrel, also easing from Wednesday’s more than two-month high of $45.28 per barrel. Brent Oil Futures have risen 15.74% so far in November, following a 10.11% drop in October.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $41.94
R1 – $42.57
R2 – $43.68
R3 – $44.31
R4 – $44.93

S1 – $40.83
S2 – $40.20
S3 – $39.09
S4 – $37.97

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $44.21
R1 – $44.81
R2 – $45.87
R3 – $46.47
R4 – $47.06

S1 – $43.15
S2 – $42.55
S3 – $41.49
S4 – $40.42