Oil prices fluctuate amid growing fears of declining demand

OPEC as well as the U.S. Department of Energy are forecasting a decline in oil demand. Moreover, in China, the largest importer of oil in the world, assumptions about a decrease in demand also cause concern, since a decrease is very likely amid a new outbreak of COVID-19.

As Jun Rong Yeap, IG market strategist, noted, fears about falling oil demand have become real, as joy over OPEC+ production cuts came out short, while price rises are slowing down.

Yeap also added, it’s assumed that OPEC+ production cuts will be able to create a certain minimum for the prices, but price increases may have limits due to possible moderation as a compromise with the Fed's tight policy.

At the same time, ANZ Research analysts say that demand worries and more supply problems may help commodity prices stay volatile.