Economic Recovery Sentiment Seems Bearish
September 29, 2020
The sentiment surrounding the economic recovery and with it the markets still seems negative. The two stories that have been repeated in the news are the fear of increasing cases of the coronavirus and no passage of the second round of stimulus. Bloomberg reports that today will be a key day for another round of stimulus. The House Democrats released their $2.2 trillion proposal yesterday evening and so far, no response from the Trump administration.
The data from John Hopkins University says that the number of people who have died from COVID-19 has now passed 1 million. The concerns that here in the US the winter may prove difficult keeps the market uneasy. The fear remains that rising cases would impact energy demand and that issue limits the upside for now or keeps prices contained for now.
Oil workers in Norway are set to go on strike tomorrow and the Norwegian Oil and Gas Association said firms will close 22% of the country’s oil and gas output which is 900,000 bpd of oil offline.
The OPEC secretary general said on Sunday that commercial inventories in OECD countries should be only slightly above the 5-year mean in Q1 2021, then fall the rest of 2021.
There was strong fighting between Armenia and Azerbaijan in the Middle East this past weekend, which is raising concerns about pipelines carrying oil in the region.
Increasing production from Libya and fears of rising COVID-19 are keeping pressure on prices and global supplies tightening add support. These are the major themes that traders continue to monitor.