Crude Oil Prices Plunge as COVID’s Third Wave Comes in Full Swing

With the third wave of COVID in full swing, it causing more and more damage to the economies of the world. The dollar is plunging. The virus also gave another blow as oil barrel prices decrease around the world.

India, the Worst Affected

Third-wave is currently at its peak, especially in South America and India. India is dealing with 200,000 cases on average. The crude oil crisis is a major blow and a sign of grave danger for India as India is already going through an oxygen crisis. India\’s current cases are well over 18 million. Moreover, to make matters worse, India consumes around 4,443,000 barrel per day. This is the 3^rd highest in the world.

The demand is increasing and the prices are decreasing. It will eventually hit the economic developments and their effects on the global market. By 1314 GMT, the last day of trade for the front-month June offer, Brent crude was $1.31 lower, or 1.9 per cent lower, at $67.25 a barrel. In the US the price of June West Texas Intermediate oil was $63.46 a barrel. It was decreased down to $1.55 or 2.3 per cent. Both contracts were on target for their largest daily fall in three weeks, but they were also on track for monthly gains of about 6% and 7%, respectively, the fifth and sixth monthly rises of the last six months.

Effects of COVID to Remain Longer

Due to slow production, prices got affected as the Chinese factories missed their target of April. On the other hand, reports suggest that Japanese factories are working at their peak and fastest rate since 2018.

Previously, the production of crude oil was at a pretty good figure in April. However, according to OPEC, due to Iran’s countered involuntary cuts and other measurements taken by the oil stakeholders, the effects of COVID will remain for a long time.

With such ups and downs in place, predictions for future oil prices are already coming in. According to a Reuters survey, the Brent oil would stand at an average price of $64.17 in 2021. This price comes after the last month’s prediction. Previously, it suggested the price of $63.12 per barrel and the $62.3 average for the standard of 2021. Keeping this in view, we can say that next month’s prediction of oil prices may also vary.