Oil declines slightly and positive morale in the European market

Oil declines slightly and positive morale in the European market

Oil declines slightly and positive morale in the European market:

The oil is falling at the beginning of the session

The price of West Texas Intermediate crude fell on Tuesday morning after Monday’s tumultuous session,
which eventually saw a modest 0.68% increase. 

The US oil production ceases due to Hurricane Ida and the projected increase in production by OPEC + are major factors affecting the market at the moment.

The price of West Texas Intermediate crude in the morning part of Tuesday’s session fell by 0.25% to $69.04 per barrel,
after ending Monday’s 0.68% rise at $69.21 per barrel.

Oil prices closed higher on Monday, driven by uncertainty over the reopening of platforms
and refineries in Louisiana and the Gulf of Mexico after Hurricane Ida.

The North Sea Brent crude barrel for October delivery in London closed up 0.97%, or 71 cents, to $73.41.

New York

In New York, the future with the same maturity as a US barrel of West Texas Intermediate crude rose 0.68%, or 47 cents, to $69.21.

After turning red at the start of the session, as traders interacted with early reports of Ida’s relatively limited impact on oil infrastructure, the market gave way to madness.

Overall, since the beginning of August, West Texas Intermediate crude futures have fallen by 6.61%,
although they are still close to 12% above the two-month low set in the middle of the month.

Prices of raw materials were affected, among other things,
by disappointing data from the Chinese economy.

China’s manufacturing purchasing managers index reached 50.1 points in August. 

Which is a fall compared to the 50.4 points in July.

China’s services sector data looks worse: In this case, the procurement managers’ index was only 47.5 points,
compared to 53.3 points a month earlier.

This raises concerns about the pace of recovery of the Chinese economy in the coming months
and the increase in fuel demand in the largest oil importing country in the world.

China and the development of the epidemic in Asian countries

Concerns about the situation in China and the development of the pandemic in Asian countries are a source of alarm for the representatives of OPEC +,
who will discuss how to maintain the group’s plan to increase the production of raw materials by 400 thousand extra barrels per day, on Wednesday.

Impact of Hurricane Ida

In terms of demand, the impact of Hurricane Ida on oil platforms and refineries in the southeastern United States is strong.

Currently, 95% of oil and gas production from production facilities in the waters of the Gulf of Mexico is inactive.

This is less than 1/5 of total US oil production.

Louisiana’s refining sector is paralyzed, and early announcements from local authorities alert power outages for another two to three weeks.

According to the latest figures released Monday by the Bureau of Environmental and Security Regulation (BSEE),
shutdowns and evacuations of facilities in the Gulf of Mexico continue to deprive the region of approximately 95% of its production.

“ِِAll offshore platforms appear to have only sustained limited damage,”
said Andy Lipow, of Lipow Oil Associates, based in Houston, Texas, near Louisiana.

However, these installations traditionally transport the extraction product to onshore storage tanks “located in low-altitude areas” in relation
to sea level and are therefore likely to have been flooded, the consultant warned.

“Emergency operations are still in their infancy, so we have very little information on the extent of the damage,” Andy Lebow recalls.

The market is also concerned about the situation of refineries in the region, some of which were in the Ida Pass.

Andy Lebow said about 12 percent of US refining capacity was still closed on Monday.

In response to a question from AFP, ExxonMobil Oil Group said that its facilities were “not significantly damaged during the storm.”

However, the group did not authorize the full operational date again.

Marathon Petroleum Group

Marathon Petroleum Group said it was working on a timetable to restore the Greville refinery,
located just west of New Orleans, which had shut down before Ida’s arrival.

In Bell Chas, in the southern suburbs of New Orleans, U.S. oil tanker Phillips
66 was assessing the case of the Alliance refinery on Monday,
which had been shut down on Saturday.

Uncertainty remained over whether electricity would be restored in Louisiana,
where nearly a million homes were still without electricity until Monday.

Gold and silver rise and reduce losses

Gold and silver rose during the night to reduce some of the losses seen during the main session. 

The trading of yellow metal returned at $1817 an ounce, while the trading of silver at $24.15 an ounce.

Collective hikes for European indices in early trading

Less than half an hour after launch, Euro Stoxx 50 futures rose by 0.24%, Ftse Mib futures in Milan by 0.24%,
Dax Index futures in Frankfurt by 0.11%, Ftse 100 futures in London by 0.38%,
Cac 40 in Paris by 0.2%, Ibex 35 in Madrid by 0.09%,
and Aex in Amsterdam by 0.38%.

Investors, who are awaiting EU inflation data and US consumer confidence,
are already looking into important US employment data, arriving on Friday,
which could help dispel remaining doubts about the start of the so-called tapering. 

The president of the US Central Bank, Jerome Powell, predicted a cautious approach to reducing the federal economic stimulus,
but markets required more precise indicators.

Oil declines slightly and positive morale in the European market