The economic recovery from the pandemic is on track, many expect that travel demand will be higher as the vaccine is steadily rolling out. “There is plenty of pent-up oil demand ready to be unleashed,” said Francisco Blanch, the BoA’s New York-based head of commodities research. Brent futures traded near $74 a barrel on Monday. In the meantime, the ever-increasing bullish outlook for oil is adding pressure on OPEC, who will have a meeting next week to consider increasing its production since the pandemic cut.
As for how remote working affects oil demand, surprisingly, not by much. Many home workers still use cars during the day to run personal errands. The travel side, however, will be a different story. The airline industry accounts for a significant portion of oil demand. As the pandemic recovery goes smoothly, the potential oil demand for traveling will skyrocket. Expectations for a tight market in 2022 is far from unrealistic.
We love to hear new ideas from traders and want to know what you think!
If you like this topic and want to suggest future topics that you find helpful, let us know by clicking the ‘submit your feedback’ button below.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.
Nothing contained in this website should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.
