A lot of crude investors woke up to some surprising news Friday morning as it was reported the industry had taken a sharp decline of more than 7% in the overnight markets. This puts an abrupt end to the seemingly never-ending rise crude has been on since the beginning of the year and is the heaviest fall the industry has taken since last September.
Analysts claim that the fall came from reports showing crude resources to currently be plentiful and overall crude demand to be down. This explanation is believed to stem from several global factors including a shaky vaccine rollout in Europe and rising cases of the virus all around the globe.
France, as an example, has recently stated their plans to implement stricter lockdown regulations in Paris and the surrounding areas. The passing of such travel restrictions would inevitably be reflected in the region’s energy usage and, therefore, take a toll on the sector in question.
As a result of Thursday’s decline, several oil producers have taken action to try to help lift crude numbers, but officials believe that the demand is simply not strong enough to get the numbers any higher than their current standing.
In the U.S. markets, prices dropped as low as $60 a barrel. That’s down from the reported high of $66 a barrel earlier this month but is still up from years past. This is proof that, despite Thursday’s sharp decline, oil numbers are still on the rise.
Officials are expected to take immediate action to prevent further devaluation of the industry by cutting back on production to limit supply and raise prices but at this moment, it’s believed by some that these actions would only work to maintain current levels instead of giving the industry the much-desired boost investors are looking for.
The unexpected decline of the crude industry is just the latest example of market unpredictability. And while we may not be able to predict market moves with 100% certainty, we can certainly maintain our base of market knowledge to help us maneuver through any tough times we may encounter. That’s why we want to invite you to join us below for our end-of-the-week session of Ask the Pro’s as we review this week’s markets, behind the scenes investing strategies, and our trading plans going forward.
P.S. – DTI Founder and Head Trader Tom Busby has brought back his popular Moneyball trading program by popular demand. Check out how you can join the Moneyball team today by CLICKING HERE!