Oil Trims Weekly Gain as Delta Lingers Over Market
(Bloomberg) -- Oil declined -- trimming a second weekly advance -- as the latest Covid-19 comeback continued to cloud the short-term outlook ahead of the OPEC+ alliance adding more barrels to the market next month.
Futures in New York fell 0.8% to trade near $73 a barrel after climbing over the past two days. Infections have spiked across the world and some countries have renewed curbs on movement, most notably in Southeast Asia where may people remain unvaccinated. There’s still confidence the recovery will endure, however, with stockpiles falling and fuel demand robust in key consumers.
“The impact of the virus on oil prices will remain marginal for now as long as the major developed Northern Hemisphere economies, which are much more heavily vaccinated, remain on a recovery trajectory,” said Jeffrey Halley, a senior market analyst for Oanda Asia Pacific Pte.
Royal Dutch Shell Plc Chief Executive Officer Ben van Beurden predicted that the demand recovery would remain strong, despite the virus resurgence, but the flare-up has interrupted the rally. Prices are heading for a modest monthly loss for July after climbing in seven of the previous eight months.
OPEC+ will make monthly supply hikes of 400,000 barrels a day from August and continue until all of its production halted during the pandemic is revived. Expectations are that the market will be able to absorb the additional barrels as demand accelerates through the second half of 2021.
Prices |
|
The prompt timespread for Brent was $1 in backwardation -- a bullish structure where near-dated contracts are more expensive than later-dated ones. That compares with 88 cents at the start of the month.
“The demand for energy remains intact and there appears to be many waiting to buy on dips,” said Howie Lee, an economist at Oversea-Chinese Banking Corp., adding that a large part of demand is still coming from the U.S. “We see a peak of $80 Brent before the end of this year.”
© 2021 Bloomberg L.P.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Gunvor CEO Sees Russian Refining Capacity Taking Hit from Drone Strikes
- These Factors Helped Brent Oil Price Break Above $85
- Sinopec Engineering Posts Higher Annual Petrochemicals Revenue
- Imperial Pipeline in Winnipeg Goes Offline for Three Months
- Gaz System to Acquire Gas Storage Poland
- Subsea7 Secures Contract to Service Woodside's Trion
- Adnoc Inks Supply Deal for Ruwais LNG Project with Germany's SEFE
- EIA Boosts USA Crude Oil Production Forecasts
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Rystad Looks at the Buzz Around White Hydrogen
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension