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Although the Delta variant of the coronavirus causes an increase in infections and restricts movement, global consumption is expected to maintain and tighten the market before the end of the year.
Even after the recovery of Covid-19, investors will continue to be optimistic about global economic growth, and oil prices will rise with the rise in the stock market.
New York futures rose 2.7% on Tuesday, the biggest gain in more than two weeks. As the market expects that economic growth will remain strong, the US and European stock markets have both hit record highs. Although delta variants have caused an increase in infections and restricted flows, global consumption is expected to maintain and tighten the market before the end of the year.
Phil Streible, chief market strategist at Blue Line Futures LLC Chicago, said: “Crude oil is riding the end of the strong performance of the US stock market.” .”
At the same time, the industry-funded American Petroleum Institute reported that US crude oil inventories fell by 816,000 barrels last week, while gasoline inventories fell by 1.11 million barrels. The US government will release its supply data on Wednesday.
However, in the short term, the spread of the virus in Asia is hitting fuel consumption, and many countries in Asia are lagging behind in vaccination rates. The return of the pandemic in the United States, especially in states with low vaccination rates, has also caused concerns.
Jean Zou, an analyst at ICIS-China, a commodity research firm, said that China’s largest refiner, Sinopec, this month reduced the operating rate of some of its factories by 5% to 10% from the original plan. .
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- West Texas Intermediate crude oil for September delivery closed at US$68.29 per barrel on the New York Mercantile Exchange, and then reported US$68.49 per barrel in after-hours trading at 4:42 pm.
- Brent crude oil for October settlement on the ICE European Futures Exchange rose 1.59 US dollars to close at 70.63 US dollars per barrel.
According to data from aviation expert OAG, as China implements new restrictions to contain the latest wave of epidemics, the number of seats provided by Chinese airlines has fallen by the largest drop since the beginning of the pandemic.
“China’s Covid-Zero strategy means that restrictions may continue to expand and tighten, thereby reducing oil consumption,” said Vandana Hari, founder of consulting firm Vanda Insights. “The delta outbreak will definitely lead to a reassessment of the trajectory of the global demand recovery previously anticipated.”
At the same time, in the United States, virus cases have surged to their highest weekly level since early February. Descartes Laboratories stated in a survey based on the movement of cellular devices that gasoline demand fell for the second consecutive week, falling by less than 1% in the week ending August 6 to 9.486 million barrels per day.
The US Energy Information Administration stated in its short-term energy outlook that US gasoline consumption in the first half of this year averaged 8.6 million barrels per day. According to the report, demand from May to July is higher than EIA’s expectations and will continue to grow to an average of nearly 9 million barrels per day in 2022.
API also reported that inventories in Cushing, Oklahoma, the largest storage center in the United States, fell by 413,000 barrels last week. Data show that the supply of distillate oil has increased by 673,000 barrels.
Other market news:
- Saudi Aramco provided at least nine Asian customers with all contracted crude oil supplies sold in September.
- The world’s largest oil companies are increasing the prices of renewable energy projects, squeezing the profits of wind and solar power plants because they are most needed to avoid climate disasters.
- According to the state news agency SANA, a fire on a merchant ship in Latakia Port in Syria has been brought under control.
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