What’s Affecting Oil Prices This Week? (Oct. 18, 2021)

While the news about COVID-19 and supply/demand fundamentals remain favorable, Stratas Advisors says they see other factors that will moderate oil prices.

John E. Paisie, Stratas Advisors
What’s Affecting Oil Prices This Week? (Oct. 18, 2021)

The movement of oil prices has been negatively correlated with the movement of COVID-19 cases, according to Stratas Advisors noted in its latest forecast. However, the question now is how much longer will crude prices remain on the upward trend? (Source: Shutterstock.com)

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.

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