Weekly Oil Report: The World In Hesitation

Pharmaceutical giants and vaccine makers announced hopefully about their jabs last week. Novavax, an American vaccine maker, announced their shots were 89% effective in the UK. Although, the trials were 60% effective in Africa, where a highly contagious variant of the virus exists. Johnson & Johnson, the American pharmaceutical cooperation, also declared their new shots were 66% globally effective with 72% effectiveness in America and 57% effectiveness in South Africa. In the upcoming week, couple of other corporations may release the efficacy rate of their vaccines.

Although the result of vaccines is encouraging, the pandemic and lockdown possibility is still hovering upon the world. The rate of received shots is lower than the pace of the virus spread. Several European countries such as Germany shut their borders again. Vaccine corporations and the World Health Organization are making effort to accelerate the vaccination process.

It was also a bitter week for the wolves of wall street. Hedge fund underwent a severe loss with the Reddit movements to save GameStop stock. The movement caused a shock to the market. The fear and stress were spreading in the market and Dow Jones Industrial Average (DJI) fell by 4% during the week.

All the wall street crisis and shutting the borders increased the volatility and fear of the market. VIX index showed nearly 60% growth during the week. The sudden bullish trend means buyer and sellers are not much hopeful toward the future. However, the Dollar Index did not indicate an emergency. It was nearly stable for the whole week.

The Energy Information Administration announced decreased level of the U.S. crude inventories. Although it was good news for the oil price, it couldn’t change the negative market sentiment in favor of the oil. Therefore, there was no significant price movement in WTI or Brent oil. At the end of the last week of January, WTI was closed at $52.17and Brent was $54.98.

Infinity Galaxy suggests trading cautiously in the upcoming week. We shall wait to see how much the virus is getting stronger and how fast the vaccination occurs. If we encounter the situation in March 2020 with global lockdowns, we may experience another crash. Otherwise, the economies’ growth is possible, which is promising for oil and bitumen in longterm.