The virus, oil prices are falling in the Sino-US tensions, the dollar is also down

The virus, oil prices are falling in the Sino-US tensions, the dollar is also down

As coronavirus infections continue to rise around the world, demand for all types of transportation has fallen in the face of various restrictions, and oil prices have fallen in the wake of turbulent fuel markets and Sino-US tensions.

The dollar is depreciating amid concerns over the internal economic crisis in the United States and the deterioration of the country's relations with China.

This is the first time since September 2016 that the US dollar index, DXY, has fallen to its lowest level. World oil prices rose slightly against the weaker dollar at the start of the day on Monday but then fell again by 2 percent.

At 10 a.m. Monday (EDT), West Texas Intermediate (WTI) crude fell 0.75 percent to 40.96. Brent crude LCOC1, on the other hand, fell 0.92 percent to 42.95 a barrel.

With the onset of the second phase of Kovid-19 infection in many countries around the world, health protection rules such as wearing masks and maintaining social distance are being imposed and travel restrictions are being imposed. As a result, commercial aviation is declining again, and demand for oil is declining.

On the other hand, long-standing Sino-US disputes over trade wars, control of the South China Sea, the coronavirus epidemic, and the imposition of Chinese security laws in Hong Kong have culminated in the closure of the Consulate.

Investors are worried about the deteriorating relations between the two countries, the world's most powerful economies. They are now leaning towards safe investments like gold or bonds without taking risks. This is having a negative impact on oil prices.

Tensions with China and the coronavirus epidemic have hit the U.S. economy hard. The United States has long overtaken all other countries in terms of virus infections and deaths. There are no signs of infection reduction so far.

The coronavirus epidemic has hit the world economy, not just the United States. Although some European countries are trying to recover from the crisis, there is growing concern that the virus is spreading again. New rules and regulations are being imposed. Which is definitely having a negative impact on the economy.

 

The United Kingdom recently dropped the country from its safe travel list as viral infections continue to rise in Spain. In addition, instructions have been issued to make quarantine compulsory for 14 days after traveling to Spain and returning to the United Kingdom. The UK government has also advised not to travel to Spain for the time being unless absolutely necessary.

The infection situation in Asian countries is also becoming more and more fragile. The spread of the virus has accelerated to the point where many countries have relaxed lockdowns to save the economy, and new lockdowns are being announced. As a result, the demand for oil is decreasing.

The US government has taken several initiatives to increase oil prices in the world market, including increasing the money supply in the market. But success is not catching up. However, if inflation is normal, oil prices will also go up.

According to analysts at investment banking company Raymond James, "a large influx of government money into the market has a positive effect on oil prices."

It has been seen in the past that when inflation occurs, the price of oil also goes up. The amount of government money that has entered the market this time is unprecedented, they say.

But some of the world's largest oil exporters, including Russia, have not been able to raise oil prices in the world market despite significantly reducing their oil production.