[ad_1]

Since the spread of the highly contagious Coronavirus Delta virus poses a threat to demand, since July, the oil rally in the first half of this year has lost momentum.

After the Fed said on Wednesday that it would start to reduce asset purchases within a few months, oil prices fell for the sixth consecutive day to their lowest level since May.

West Texas Intermediate crude oil futures closed down 2.7%, falling below $64 per barrel, as the prospect of reduced stimulus measures shook the market, and there was a broader sell-off in commodities.

The delta virus variant used for air travel is weakening demand, and the enthusiasm for air travel in the United States and Japan is weakening.

The physical market in Asia is weakening due to weak buying from China and the sale of oil in its strategic reserves by India.

“As the Fed takes steps to cool the economy, the dollar is strengthening significantly,” said John Kilduff, a partner at Again Capital LLC. “As the market is hit by weak Chinese demand, oil is already under downward pressure, and the weakening of the attractiveness of commodities is contributing to a further decline.”

As the spread of delta variables poses a threat to demand, the oil rally in the first half of this year has lost momentum since July.

At the same time, OPEC+ promotes the gradual restoration of supply. A combination of factors led leading analysts to lower their price forecasts for the second half of this year.

In order to alleviate the impact of the US economic pandemic, the Fed buys $120 billion in assets every month to boost commodities.

The minutes of the central bank’s July meeting showed that its monthly bond purchases may fall, as most participants now believe that it may be appropriate to start slowing down the pace of stimulus.

“Worries about economic growth, a stronger dollar and a safe-haven environment do not help oil prices,” said Giovanni Staunovo, an analyst at UBS. “Demand will continue to recover in an uneven manner in the coming weeks, and the oil market will still be in short supply. Therefore, this will still support future prices.”

price:

  • WTI for September delivery in New York fell 1.77 US dollars to close at 63.69 US dollars per barrel. Earlier it fell by 4.3%.
  • The October settlement price of Brent crude fell by US$1.78 to close at US$66.45 per barrel.
  • As various levels of blockade measures are still being implemented, road traffic in Southeast Asian countries is still sluggish.

“The consumption indicators in this region have global influence,” said Stewart Glickman, an energy stock analyst at CFRA Research. “Investors follow wherever China goes.”

Related reports:

  • The Asian spot crude oil market weakened this week as Chinese purchases were weak, while India unexpectedly sold oil from its strategic reserves to state-owned refineries.
  • A week after the White House called on OPEC+ to speed up oil production, the organization may be considering a very different route.
  • According to Energy Aspects, Saudi Arabia may consider suspending the next OPEC+ supply increase plan.



[ad_2]

Source link

Leave a Reply