Sign Up for FREE Daily Energy News
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2

Vista Projects
Copper Tip Energy Services
Copper Tip Energy
Vista Projects

Oil Ekes Out Weekly Gain as Demand Rebound Offsets Virus Fears

These translations are done via Google Translate
(Bloomberg) —Oil squeezed out its first weekly gain in three on signs that global demand is holding up despite concerns that the renewed spread of the virus could stall the recovery.
Futures in New York rose 0.2% this week, completely recouping a selloff on Monday that was stoked by the rapidly spreading delta variant. Fuel demand and road traffic from the U.S. to Asia and Europe remains resilient, underscoring expectations that the recovery hasn’t been derailed and global inventories will continue to shrink.“The fact of the matter is that we’re not going to see, at least in the U.S. and in Europe, a massive return to strict lockdown,” said Ed Moya, senior market analyst at Oanda Corp.
WTI settles above $72 a barrel after Monday's plunge

Crude has rallied nearly 50% this year as ongoing vaccination campaigns have propelled reopenings. Data this week showed gasoline demand is essentially back to normal in many of the biggest consuming countries. Meanwhile, OPEC+ and U.S. shale producers have shown discipline in returning shuttered supplies to the market.

The 7.5% price slump on Monday came just a day after the Organization of Petroleum Exporting Countries and its allies led by Saudi Arabia and Russia finalized an agreement to gradually restore production they halted during the pandemic. OPEC+’s modest increase eased fears around concerns of oversupply.

“Everybody thinks they are going to flood the market, and then they take a step back and realize that, hey, they’re adding because the supply is being burned off,” said Phil Streible, chief market strategist at Blue Line Futures LLC in Chicago.

ROO.AI Oil and Gas Field Service Software

The recent dip in prices is a buying opportunity and Brent prices should hit $100 per barrel next year, said a group of analysts at Bank of America Corp. in a recent note to clients.

  • West Texas Intermediate crude for September delivery added 16 cents to settle at $72.07 a barrel in New York.
  • Brent for the same month rose 31 cents to end session at $74.10 a barrel.

This week, Schlumberger and Baker Hughes Inc. suggested the rebound in the U.S. shale patch will likely slow this year as companies keep a lid on spending. Despite a strong recovery in crude prices in 2021, the shale industry is largely resisting adding new supply.

Still, the virus continues to pose a challenge. The Olympics opening ceremony kicked off in a nearly empty stadium in Tokyo, amid a record number of new infections linked to the games. In China, there are signs that a fresh outbreak at the airport in the eastern Chinese city of Nanjing has quietly spread to other provinces.

Related coverage:
  • The U.S. is swimming in so much jet fuel that even this summer’s surge in air travel can’t save the market.
  • Reliance Industries Ltd., led by Asia’s richest man Mukesh Ambani, posted worse-than-expected quarterly profit as India’s brutal second Covid-19 wave triggered local lockdowns and hurt its energy and retail businesses.
  • Vitol Group has paid a record $2.9 billion to its executives and staff through share buybacks so far this year after the world’s largest independent oil trader notched up its best ever results in 2020.

Share This:

More News Articles