Crude Oil Price Hits $70 On Pemex Fire, Zero New COVID-19 Infections in China

Summary:

Crude oil price on the Brent benchmark pushes higher for the second day as Pemex oil fire and zero new infections in China prop up prices.

Crude oil price on the Brent crude extended the recovery for the 2nd day in a row, as full approval for the Pfizer/BioNTech coronavirus vaccine stokes hopes of recovery of demand. Also helping to boost crude oil prices on the day is the supply cut that has resulted from the Pemex offshore platform.

Experts are hoping that the final approval granted the Pfizer/BioNTech vaccine by the US Food and Drug Administration (FDA) will convince more vaccine sceptics to take the vaccines voluntarily. China has also reported no new coronavirus infections since the weekend, which has ignited hopes that demand from the world’s largest oil importer will expand due to the apparent containment of the delta COVID-19 variant.

According to a quote from a company executive by Bloomberg, Sunday’s fire on the Pemex platform in the Gulf of Mexico has effectively reigned in more than 420,000 barrels of production. There are currently no timelines for resumption of production following the incident, which led to five fatalities.

Brent crude is up 1.5% on the day.

Crude Oil Price Outlook

The 70.01 resistance capped Tuesday’s gains after the breach of the descending trendline resistance that capped recent highs. Price recovery beyond 70.01 targets 71.44, with 73.34 and 75.52 serving as additional upside targets.

On the other hand, a pullback following Tuesday’s stall at the 70.01 price mark allows the bears to initiate a move towards 67.74. A breakdown of this support opens the door towards 66.81, with 65.95 and 64.64 coming into the picture as potential targets if the decline is more extensive.