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Nigeria’s flagship bonny light lost some ground at the last trading session, as concerns about the rise in COVID-19 cases raised bearish sentiments that the world’s energy demand will falter as major oil-producing countries including Nigeria get ready to increase in output for next month.
On Saturday, the world’s biggest economy’s COVID-19 related deaths exceeded 140,000 as caseloads continued to rise across America’s economic hubs while data from Nigeria Centre for Disease Control (NCDC) showed Nigeria recorded 653 new cases of COVID-19 on Saturday. According to the health agency, six deaths were also recorded on Saturday, bringing the fatality from the virus to 778.
Despite the resurgence of the COVID-19 virus energy demand has broadly recovered globally after the global restriction on movements and businesses closed to tame man’s most deadly pandemic.
However, global consumption for energy remains below pre-pandemic levels, with the rampaging virus resurgence making many crude oil traders, to shut down their long positions.
In the coming weeks, Nigeria’s bonny light is expected to test the $42.50 level once again. There is also a high chance that Nigeria’s flagship crude might even pullback even lower, to around the $40.50 level in the mid-term.
What it means: This could also mean that Nigeria’s Bonny light could once again remain in a sideways range between the $40.50 and $45 if no clear macros are in sight leaving traders little choice other than to place their stop losses above the $38.50 level.
Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics, gave vital macros, surrounding the world’s largest consumer of oil. He said;