Meanwhile, Vitol, the world’s largest independent oil trader, has suggested that the global oil demand would soon plunge by more than 10% from the typical 100 million barrels per day consumption, as the coronavirus pandemic otherwise known as COVID-19 forces countries into lockdown.
Oil price yesterday in the global markets fell more due to the lockdown in India as crude oil makes up for four of the top five imports in India. After the lockdown midnight on Wednesday, oil demand was expected to go down as even after the Coronavirus spread, inflows of crude oil to India and Japan were largely steady, despite the on-month dip with falls mainly witnessed from the arrivals of OPEC.
The bounceback in oil price, however, happened after U.S announced its $2trillion stimulus package, just as Sugandha Sachdeva, Vice President at Religare Commodities predicted, “The US Fed has shown some pro-active approach to counter Coronavirus spread in the US while the US administration is expected to announce the bailout package to help the US economy come out of the COVID-19 virus impact on it. These measures are expected to bring some bounceback in the oil prices, but, the overall trend of oil price is still weak.” Advising commodity investors to book profit on every bounceback she said, that crude oil price is facing strong resistance at $28 per barrel levels at NYMEX while it has strong support at $20/barrel.
Oil price Wednesday morning crashed to the levels of around $25 per barrel. However, due to the lowering demand, especially in the Asian market after the lockdown in India, China, and gulf countries, the overall trend of oil price is still negative.