FXStreet reports that while additional downside risk is possible, strategists at TD Securities see oil as a buying opportunity after rout.

“The petroleum complex will continue to show weakness for as long as the risks from new COVID-19 breakouts are not well defined. However, we also believe that the impact on petroleum product demand may not be as severe as some fear, owing to the fact the world has gotten used to dealing with COVID-19 outbreaks, and that much of the Western world is becoming better protected with vaccines. This includes the US, as vaccine distribution is likely to grow.”

“With demand likely still increasing rapidly into Q3-2021 and shale supply hindered by the lack of meaningful capital expenditure growth, the proposed production increase by OPEC+ imply a deficit market over next couple months, provided that the spread of COVID does not catalyze widespread lockdowns.”

“We believe that the crude market could see prices spike when Delta worries moderate, with WTI and Brent looking toward $80/b again.”