Oil is falling 7% in a week.. and concerns about Delta still going
Oil is falling 7% in a week.. and concerns about Delta still going: Global crude oil prices posted the biggest weekly fall since October, as COVID-19 Delta-variant infection in China and elsewhere in the world caused uncertainty about demand growth.
West Texas Intermediate crude futures fell 1.2 percent on Friday and 7.7 percent last week.
The US dollar rose after the better-than-expected US jobs report, weakening the attractiveness of currency-priced goods.
Delta variant weakens oil
China has imposed increasingly strict restrictions on movements to combat the spread of the killer variant,
while daily cases have been reported in Thailand and Sydney, Australia.
According to experts: “The market is responding to concerns that delta variants, especially in Asia,
will significantly affect movement.”
After the rise in crude oil prices in the first half of this year as demand increased,
recent evolutions in the pandemic have reduced crude oil prices, as well as many other commodities.
The current WTI future premium against second-month futures was reduced to 18 cents from 72 cents the previous week, indicating continuing demand concerns.
Senior analyst Danske at A/S Jens Naervig Pedersen bank said: “The oil market is facing difficulties this week.”
He added: “On the one hand, the market is concerned about the economic implications of a Delta variant infection,
but on the other, facilitation policies provide strong support.”
While demand expectations from Asia are weak, there are some better measures in the United States, with no strict movement restrictions.
According to the Department of Transportation, long-distance travel on the highway for the week ending August 1st is almost unchanged from the week recorded in 2019, before the pandemic spread.
Gasoline shipments to the Spanish market rose last month above pre-pandemic levels.
However, if tightening procedures are examined and eased in most regions,
demand appears to continue to increase, and the impact of the latter wave will be much lower than the previous one,
according to the experts.
Oil performance this week
The Delta variant of the coronavirus caused the global crude oil market to fluctuate this week.
At the end of the week, oil prices fell by about 7% – the largest weekly decline in the last nine months.
On August 8, world oil prices continued to fall after the closing of the last session of the week.
Light West Texas Intermediate crude lost 44 cents to $67.84 per barrel, and Brent lost 21 cents to $70.49 per barrel.
Thus, the price of Brent oil this week fell by more than 6% – posting the biggest weekly loss in the last four months and West Texas Intermediate crude fell by about 7% – the largest weekly fall in 9 months.
All analysts said that the Delta variant impact is already emerging and that risk reluctance
continued to emerge in many markets, not just the oil market.
According to Reuters
According to Reuters, US President Joe Biden said the number of Covid-19 infections in the US has now risen to the highest level in the past six months and is expected to continue to increase and the Delta variant continues to cause significant damage to the world’s largest oil consumer.
The oil company Baker Hughes (USA) said on August 7 that the number of oil platforms in the United States this week had increased by 2 to 387.
However, this did not show an increase in demand because the number of recently opened rigs was much slower than planned.
At the same time, in the Asia region, Japan is preparing to expand its restrictions to include more regions due to the delta variant. China, the world’s second-largest oil consumer, has also imposed a blockade in some cities and canceled some flights.
Hui Lee, an economist at the Bank of Singapore OCBC, said that the Delta variant is already starting to show impact, and risk reluctance will appear in many markets, not just oil.
Detailed report
In a trading week where oil supplies increased from OPEC + and doubts about the bloc’s production compliance increased, travel restrictions due to concerns about the pandemic caused gasoline prices to be recorded for today’s trading week.
In the first trading session of the week, world oil prices tended to fall sharply when the market recorded negative developments for the Covid-19 epidemic due to delta surges, despite a series of positive economic data from the United States and the European Union.
China
On August 1, China announced 75 new Covid-19 infections, including 53 community cases,
detected in 10 provinces In the past 10 days, China has recorded 284 infections in 14 provinces and cities.
In the United States, according to data released by Johns Hopkins University and Bloomberg University on July 30,
the number of new COVID-19 infections recorded increased 5 times compared to the previous month,
the highest since February 2021 reaching 540.00 cases.
travel restrictions
Negative developments in the COVID-19 pandemic have forced the United States,
China, and many European countries to re-implement pandemic preventive measures,
including travel restrictions.
the demand for crude oil
While the demand for crude oil faces significant risks,
the supply of crude oil has increased in accordance with the OPEC + agreement,
as well as the willingness of the oil-exporting countries to increase production.
The price of light West Texas Intermediate crude for October 2021 delivery was recorded in the early morning of August 2
at $72.85 per barrel, and the price of Brent oil for October 2021 delivery at $74.94 per barrel.
A series of positive economic data from the United States and Europe only helped oil prices escape the fall,
without falling into recession and tending to rise slightly in the August 3 session,
but only in the short term.
Uncertainty about the production compliance of OPEC + countries and the resurgence of the COVID-19 pandemic
in the United States and China led to a decline in oil prices on August 4.
The price of light crude oil for October 2021 delivery in the early morning of August 4,
was recorded on the New York Mercantile Exchange at $69.79 per barrel,
while the price of Brent oil for 2021 delivery at $72.22.
pressure on oil prices is increasing
Downward pressure on oil prices is increasing as the crude oil market constantly warns
of the nature and risk of the fourth Covid-19 outbreak with Delta and Delta Plus surges.
In China, the recent COVID-19 outbreak has led to the shut down of the country’s major tourist attractions,
festivals, and culinary events … It is also forced to postpone or cancel.
Many strict measures have been introduced, such as Beijing that has prevented people from 23 provinces
and cities from traveling to the capital by rail.
In the face of these concerns, world financial group Nomura holdings cut China’s economic growth forecast
for the third quarter of 2021 from 6.4% to 5.1% and the last three months of the year from 5.3% to 4.4%.
Throughout the year, Nomura Holdings reduced China’s economic growth forecast from 8.9% to 8.2%.
Oil is falling 7% in a week.. and concerns about Delta still going