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Hazloc Heaters
Copper Tip Energy Services
Copper Tip Energy
Hazloc Heaters

Crude Oil Retreats as Delta’s Persistent Menace Rattles Nerves

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These translations are done via Google Translate
(Bloomberg) Oil fell after two weekly increases as the spread of the delta coronavirus variant continued to challenge demand, while data signaled a slowdown in China.

West Texas Intermediate shed 1.1%, after rising 2.6% last week. The virus is clouding the outlook for consumption across the Asia Pacific. China faces a fresh outbreak, Thailand is set to expand its quasi-lockdown measures, and infections in Sydney matched a record. Data showed China’s economic activity eased in July, implying a more steady recovery as risks mount.

WTI has gained in the last four months, but July's rise was the smallest

While oil prices have gained in each of the past four months, July’s increase was the smallest as Covid-19 offset the demand recovery. OPEC and its allies have largely followed through with plans to ease supply curbs, but some countries could struggle to return output to pre-Covid levels. Traders are also monitoring a rise in tensions between Iran and the U.S., after Washington formally blamed Tehran for an attack on an Israel-linked oil tanker.

Oil has “given back some of last week’s gains in response to weaker China data and continued worries about the spread of the delta variant,” said Ole Hansen, head of commodities research at Saxo Bank A/S. Crude has settled into a range “with delta demand worries offsetting the current tight supply outlook.”

Sky Eye Measurement
Sky Eye Measurement
  • WTI for September delivery dropped 84 cents to $73.11 a barrel as of 8:40 a.m. in New York
  • Brent for October settlement fell 73 cents to $74.68 a barrel

Prices are forecast to be “fairly rangebound” as inventory draws limit the downside, while the market lacks a catalyst to push higher, according to Warren Patterson, a commodity strategist at ING Group. He expects Brent to average $75 a barrel this quarter.

See tanker-tracker story: Saudi, Kuwait Export the Most Oil in Months

Related news:
  • India’s sales of diesel, a bellwether for the nation’s economic activity, remained below pre-virus levels last month due to the slow rollback of some restrictions following a deadly wave of Covid-19.
  • Iran’s Supreme Leader Ayatollah Ali Khamenei will officially confirm Ebrahim Raisi as the Islamic Republic’s new president on Aug. 3, marking the end of Hassan Rouhani’s government.
  • Russia increased oil production in July for the first time in three months, after more generous quotas were extended to the entire OPEC+ alliance.

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