Crude oil prices on Monday dipped to a low of $65.53 a barrel after trading at a record high of $76.93 earlier this month as the new Delta variant of the coronavirus threatens economic growth across the globe.
The price of crude oil is projected to be in bearish mood as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) plan to increase production, and with the health crisis further hampering economic growth prospects.
The grouping on Sunday decided to adjust their overall production upward by 400,000 barrels per day on a monthly basis from the beginning of August.
Economies are likely to witness a low fuel consumption pattern after the emergence of the new coronavirus variant, thus reducing the demand for crude.
According to Worldometer, Indonesia had a higher weekly rate of infections than India and Brazil as of Tuesday. And many other countries around the world are at high risk of infection from the new variant of Covid-19, further slowing economic activities.
The Times of India said Asia’s largest oil importer India cut orders by 36 per cent from Saudi Arabia in May with its economy still recovering from the onslaught of the Delta variant.
The BBC reported that the Covid-19 infections in the UK exceeded 50,000 cases last Saturday, the highest number reported in the country for the first time since mid-January this year.
For technical analysis, crude oil is running in a bearish trend and being traded at $66.50 a barrel, lower than the 50-day moving average price of $69.85 a barrel on Tuesday morning.
For this week’s trading recommendation, investors can consider trading the price of crude oil in the range of $65 to $75 per barrel.