Crude oil stocks fell for the fourth week in a row
Crude fell on Tuesday as investors paid for the latest rally, but market sentiment remained firm in hopes of a quick recovery in oil demand in the US and European markets and a return on Iranian crude.
Brent crude futures for August were down 10 cents or 0.1% to $ 74.80 by 0110 GMT, while US West Texas Intermediate (WTI) crude for July was $ 73.44 a barrel, down 22 cents or 0.3%. The WTI for August was down 15 cents, or 0.2%, at 72.97 a barrel.
Brent was up 1.9% and WTI was up 2.8% on Monday.
Both definitions have arisen over the past four weeks on the pace of global COVID-19 vaccines and the two hopes for summer travel. Spot premiums for crude in Asia and Europe have been raised for several months.
“Oil prices have taken a breather, but the tone of the markets remains firm amid expectations that fuel demand will increase rapidly with the economic recovery in Europe and the United States,” said commodity broker Fujidomi Co. analyst Toshitaka Tawa.
Brent has raised crude prices forecast for Bofa Global Research this year and beyond, saying tightening oil supply and recovering demand could push oil shortages to $ 100 a barrel by 2022.
According to Fujidomi Govin Dawa, investors are expected to return to the U.S. Focus on inventory data as crude oil stocks fall for the fourth week in a row.
Refineries have been at maximum activity since January 2020 as US crude oil stocks fell on June 11 last week, indicating continued demand growth.
U.S. crude stocks were expected to fall for the fifth week in a row, while an initial Reuters poll on Monday showed that distillate and petrol had risen last week.
The price gap between the two most actively traded oil deals in the world has narrowed to the lowest level in more than seven months, proving that US oil production is still in the Covid-19 recession and the market is unlikely to deliver.
Iran Nuclear Agreement
Negotiations to amend the Iran nuclear deal were suspended on Sunday, with the country’s presidential election being won by hardline judge Ibrahim Raisi.
Raisi on Monday backed talks between Iran and the six world powers to renew the 2015 nuclear deal, but refused to meet with US President Joe Biden, even though Washington had lifted all sanctions.
“The low probability of a return to Iranian crude oil due to the new tough president also supports the market,” Fujitomi’s Tawa said.