As we expected, crude prices continued going up last week, but more moderately than the prior week. The price of Brent crude ended the week at $84.92 after closing the previous week at $82.58. The price of WTI ended the week at $82.66 after closing the previous week at $79.59.
The movement of oil prices has been negatively correlated with the movement of COVID-19 cases—when COVID cases are increasing, oil prices have weakened and when COVID-19 cases have been waning, oil prices have strengthened. When COVID-19 cases started moving upwards and peaked in the beginning of September, oil prices went from $77 down to $65. With the subsequent decline in COVID-19 cases, oil prices have rebounded to new highs. So, the question now is how much longer will crude prices remain on the upward trend?
While the news about COVID-19 and supply/demand fundamentals remain favorable, we do see other factors that will moderate oil prices.