Weak Demand Outlook Pushes Crude Oil Prices Southward
Weak crude demand outlook pushes oil prices southward Thursday following an increase in inventories in the United States and rising covid-19 delta variant across the world.
These oil rally downside risks come as the Organisation of Petroleum Exporting countries and allies (OPEC+) sets to begin the implementation of productions agreement after the cartel resolves impasse with members –the United Arab Emirates and Saudi.
OPEC+ is expected to incrementally raise supply from August 2021 down year, according to the group. International benchmark Brent crude was trading at $72.04 per barrel, dropped 0.26% after closing at $72.35 a barrel yesterday.
American benchmark West Texas Intermediate (WTI) was trading at $70.19 a barrel at the same time with a 0.15% fall after ending the previous session at $70.30 per barrel.
The fluctuation in the prices continues following the data on US commercial crude oil inventories which increased by 0.5% for the week ending July 16.
Inventories rose by 2.1 million barrels to 439.7 million barrels, marking the first increase after 8 weeks.
Increasing cases of Delta variant also hinder the oil prices as it raises concerns on the global economic outlook and the oil demand growth.
First found in India and reported to be more resistant to the existing vaccines, Delta has spread across 100 countries so far. The World Health Organization expects Delta to be the most dominant COVID-19 strain globally.
US commercial crude oil inventories increased by 0.5% for the week ending July 16, according to the latest data released by the Energy Information Administration (EIA).
Inventories rose by 2.1 million barrels to 439.7 million barrels, marking the first increase after 8 weeks.
Strategic petroleum reserves, which are not included in commercial crude stocks, did not change and remained at 621.3 million barrels last week, the data revealed. Gasoline inventories, however, decreased by 100,000 barrels to 236.4 million barrels over that period.
Crude production falls
According to EIA data, US crude oil imports increased by 875,000 barrels per day (bpd) to around 7.09 million bpd for the week ending July 16, while crude oil exports decreased by 1.56 million bpd to around 2.46 million bpd.
Read Also: OPEC Forecasts 6% Jump in Global Oil Demand for 2021
The data showed that US crude oil production fell by 56,000 bpd to approximately 11.77 million bpd during the same period. The EIA forecasts that US crude output is estimated at 11.1 million bpd for 2021, down from 11.24 million bpd in 2020.
Weak Demand Outlook Pushes Crude Oil Prices Southward
