Oil Slides Amid Rising Cases of COVID-19 Delta Variant
Oil slides on Tuesday over reported cases of rising covid-19 delta variant spread in key economies, dampening demand outlook for crude. Reacting to demand worries, the international benchmark Brent crude printed at $73.59 per barrel after it sheds 0.15% from $73.70 a barrel on Monday.
American benchmark West Texas Intermediate (WTI) traded at $71.83 a barrel at the same time, plunged 0.11% after ending the previous session at $71.91 per barrel.
Despite the fall in prices during the early session, there is a positive sentiment on oil prices, which prevented further decline.
The World Bank and COVAX announced the COVID-19 Vaccines Global Access initiative, to speed up vaccine supplies to developing countries where inoculation rates lag far behind those of richer nations.
Through its Advance Market Commitment (AMC) program, COVAX expects to make up to 430 million more vaccine doses available between late 2021 and mid-2022.
Under the AMC program, countries will be able to choose and commit to procuring specific vaccines based on their preferences.
According to statistics from Our World in Data, only 1.1% of people in these nations have received at least one dose, compared to 26.9% of the global population.
Also, providing support on prices, the UK on Monday reported the lowest daily total of new COVID-19 cases since July 4.
Investors are now keeping tabs on the inventory data forecast of the American Petroleum Institute (API) later on Tuesday and the data of the US Energy Information Administration (EIA) on Wednesday.
Today, the United States issued travel warnings to Spain and Portugal because of rising COVID-19 cases.
“With oil demand growth likely outpacing supply growth in the near term, we expect oil tightness over the summer, which should boost oil prices,” UBS analysts said in a research note.
In one encouraging sign for fuel demand, Britain on Monday reported its lowest daily total of new COVID-19 cases since July 4, suggesting a recent surge in infections has passed its peak.
Olympic host city Tokyo, however, is on track to report a record number of coronavirus cases on Tuesday even as athletes continued to compete across the city on the fourth day of the Games.
Analysts tracking mobility data remain confident about fuel demand, counting on vaccinations to guard against strict new lockdowns.
Read Also: Oil Prices Plunge over Outbreak of COVID-19 Delta Variant
Global oil markets are expected to remain in deficit despite a decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, to raise oil production through the rest of the year.
Oil Slides Amid Rising Cases of COVID-19 Delta Variant
