Tishwash: Experts: Oil ends a strong week, and we are optimistic about the return of demand
Oil maintained most of the gains it made for three consecutive days, trading above $71 a barrel, amid experts’ optimism that rising demand will tighten the global energy market.
US West Texas Intermediate prices fell 0.5% after rising more than 8% in the previous three sessions, as this series of gains indicates that prices have not changed much throughout the week, after recovering most of the losses on Monday, when crude oil prices fell due to concerns about the outbreak Mutant “Delta” from the Corona virus, which would limit consumption at a time when the “OPEC +” alliance moved to increase production.
This comes at a time when crude oil prices have risen since the beginning of 2021, as the introduction of vaccines has allowed economies to reopen, increasing energy demand and pulling back the glut that has built up during the pandemic.
While the emergence and outbreak of the highly contagious “delta” mutant has led to a reversal of this process, especially in parts of Asia, where investors are betting on the continued rise of oil as it is.
Data this week showed that demand for gasoline has essentially returned to normal in many of the largest oil consuming countries, as well as lower crude oil holdings in the Cushing hub.
However, challenges remain in the United States at another pivotal moment, as COVID-19 cases are rising again and beds are filling in some hospitals, according to the Centers for Disease Control and Prevention.
Elsewhere, the number of infections in France more than doubled in the past week, and South Korea expanded social distancing steps amid a record number of cases.
“While there is growing concern about the impact of the delta mutator, the oil community may have overreacted,” said Vandana Hari, founder of Vanda Insights in Singapore.
She added, “This does not mean that optimism in full demand has returned, but rather it will remain subject to the slightest concern about pockets of resurgence of widespread outbreaks, and this could lead to a curb on prices not too far from current levels.”
The prices of West Texas Intermediate crude for September delivery fell 0.5% to $71.58 a barrel on the New York Mercantile Exchange by 7:10 am in London.
While the most active prices fell by 0.3% this week, Brent crude for September delivery fell 0.5% to $73.46 a barrel on the European ICE Futures Exchange.
The Organization of the Petroleum Exporting Countries and its allies plan to add 400,000 barrels per day to the market in August and in subsequent months until the supply cuts imposed at the start of the epidemic are completely eliminated.
Additional supplies during the current half of the year may come from Iran if Tehran manages to conclude a nuclear agreement that allows the lifting of US sanctions on its crude oil.
The difference in the spot price of Brent crude reached 62 cents a barrel in the opposite direction yesterday, Friday, this is the bullish pattern – when the current price is higher than the prices in the futures market, unchanged from the level recorded a week ago. link