Brent fell 1.9% on Friday, likely on profit-taking after it had risen 4.0% Monday through Thursday. The uncontrolled outbreak of COVID-19 in India continues to be the main factor weighing against crude oil prices at this moment. Strategists at OCBC Bank expect Brent Oil to remain below the $68 level at least until India contains the outbreak.
See – Gold Price Analysis: XAU/USD to see selling pressure on risk-on return – OCBC
India remains the wild card
“The uncontrolled coronavirus outbreak in India will continue to pose the biggest downside risk to oil prices for now. Bloomberg reported in April, gasoline consumption in India probably fell 6% and diesel about 2%. This consumption weakness is likely to continue into this month, given the ever-worsening daily cases in India.”
“We see selling pressure starting to build each time Brent attempts a break above $68. This cap may persist until India contains its latest outbreak, which may take at least a month or more. Our bias, however, is for oil to continue breaking to the upside.”