FX.co ★ Oil wins back losses of the previous week

Crude oil prices jumped Monday morning after the global contraction last week. Colossal losses were recorded: the benchmark Brent brand immediately parted 8%, and WTI sank by 7.4%.

On the last business day last week, news broke that US President Donald Trump tested positive for COVID-19 which had a rather serious impact on the oil market. Trump himself announced positive test results on his Twitter account. Literally immediately there was a collapse in the cost of raw materials, which led to such a significant decrease in its cost.

Moreover, over the past weeks, the news of an increase in the number of COVID-19 infections in the world has stirred investors. The situation is especially acute in European countries and the United States of America. The second wave of the pandemic has practically become a reality there. The introduction of a new portion of restrictive quarantine measures is becoming a direct threat to economic recovery from the consequences of the first, spring wave of the pandemic. In this regard, the news of Trump's test results and some members of the White House turned out to be the icing on the cake, which led to an increase in the panic state of market participants. Of course, the drop in oil prices, in this case, was inevitable.

However, a reverse process began this morning, and the raw materials will gradually regain their positions, especially since Trump's health condition, according to his attending physician, is not in danger: he is on the mend and very soon will be able to return to the fulfillment of his official obligations in full, as well as fully engage in the election race. The oil market reacted positively to such statements: black gold immediately began to grow in price, winning back all the losses.

Nevertheless, all forecasts regarding the movement of the oil price remain in the negative zone. This is primarily due to the deteriorating epidemiological situation in the world. The second wave of the pandemic will inevitably be followed by restrictive measures, which will be extremely difficult for the world economy to cope with since it has not yet fully recovered from the effects of the first wave. In addition, the demand for oil raw materials risks being under even greater pressure than it is now. At the same time, OPEC is taking steps to contain the excessive level of supply in the market. Traditionally, this is due to compliance with production quotas, the implementation of which is now under threat, since some countries have again begun to exceed the required volumes.

The greatest concern of investors this week, of course, is still on the growing cases of the coronavirus infection around the globe. Also, the adoption of a new stimulus package designed to support the US economy, which suffered during the first wave of the COVID-19 pandemic, remains a matter of concern.

The price of futures contracts for Brent crude oil for delivery in December on the trading floor in London rose immediately by 2.06% or $0.81, which allowed it to move to the level of $40.08 per barrel. And this is above the strategically and psychologically important mark of $40 per barrel. There were hopes that the raw materials will be able to recoup all their losses from the previous week. Friday's trading session ended with a decline of 4.1% or $1.66, which forced raw materials to move to the lowest level in almost four months at $39.27 per barrel.

The price of futures contracts for WTI crude oil for delivery in November on the electronic trading platform in New York rose 2.38% or $0.88, which sent it to $37.93 per barrel. Friday's trading also recorded a decline of 4.3% or $ 1.67, leaving the final price at $ 37.05 per barrel which was the lowest since the beginning of September this year.