U.S. Energy Information Management (EAA) U.S. Confirming an astonishing structure in the supply of crude oil, the rising Govt-19 cases reduce the global fuel demand outlook. However, the black liquid kept most of its gains from the previous session above expectations that products would be tight by the end of 2021.
Brent oil futures rose 0.2% during the previous session. Was 71.87. WTI futures were up 4.6% at $ 69.97 on Wednesday, up 0.47%.
EIA’s U.S. crude oil supply data released on Wednesday showed that 2.108 million barrels were built in the first week of July. Recorded the previous week.
U.S. Petroleum Company crude oil supply data released the previous day showed that 806,000 barrels had been built.
Edward Moya, a senior analyst at OANDA, told Reuters: “Energy volatility has risen as traders with short-term demand weaken from COVID-19 delta variance concerns and expectations that crude shortages will last until the end of this year.”
“Oil will struggle to make up for all of its losses until new sanctions or sanctions across Southeast Asia, Australia, and Europe begin to ease,” he said.
However, EIA data showed a 121.00-barrel balance in petrol inventory, which is an indication that demand is high during the summer driving season.
Meanwhile, at the start of the week, OPEC + reached an agreement to raise 400,000 barrels per day from August to December 2021. However, the cartel is unlikely to hit the market soon after the controversial resolution and talks to bring back Iranian supplies. The market is also late.
Therefore, as the number of global cases increases, the demand for fuel that is more relevant to market fundamentals is declining due to new COVID-19 regulatory measures, City researchers said in a statement.
“Only a really large demand deficit would indicate a market balance surplus,” the note added.
A separate JPMorgan (NYSE: JPM) note predicts that global demand will increase by an average of 99.6 million barrels per day (BPD) in August 2021, from April to 5.4 MPT.