Oil price traded around $43 a barrel and turned bearish from Wednesday high $43.17 to Friday low at $38.50 a barrel during last week.

OPEC’s 60th anniversary celebrations have been postponed in the wake of the Covid-19 pandemic, originally scheduled to take place on this September in Baghdad, where OPEC was originally founded. In addition to its 60th anniversary, this September also marks the 55th year since organization’s secretariat moved to the Austrian capital of Vienna.

As of September 6, 2:14pm CEST, there have been 26.7 million confirmed cases of Covid-19 globally, with 876,616 deaths, according to the latest figures from the World Health Organization (WHO). The region that has been worst affected by the virus is the Americas, WHO data shows. As of September 6, this region has registered 14 million confirmed cases of Covid-19 and 484,079 deaths, according to WHO figures.

According to Rystad Energy’s senior oil markets analyst Paola Rodriguez-Masiu, who made the statement in a comment on oil price on Monday, “We don’t see oil prices bouncing back anywhere near to the $50 per barrel level anytime soon unless OPEC+ decides to deepen the current cuts. Although ideal, we find this scenario unlikely. Instead, the alliance will likely focus on ensuring compliance with the implementation of the current agreed cuts, exerting maximum pressure on countries failing to comply. Which in itself is not an easy task either” Rodgriguez-Masiu said in the statement.

The slump in oil prices was also fueled by reports of larger-than-anticipated cuts in Saudi Arabia’s crude pricing to Asia, which the Rystad Energy analyst said was interpreted by the markets as a sign that the demand recovery in the region is running out of steam.

China reported that crude imports fell in August for a second month amid brimming stockpiles and congestion at its main ports. If China does not boost again its oil imports soon, this could be interpreted as a warning sign that even heavy industry-propelled economies, that traditionally come back more quickly than others in times of crisis, are feeling the strain.

Trade Recommendation:

Sell the market at $40 – $41.50

Stop-loss at $42.50 – $43.00

Take Profit_ TP1: at $37 – TP2: $34.5

Analyzed by: Mr. Nhim Kosol,Independent Analyst