Oil Remains in the Red and Erases Last Week’s Gains

The oil prices have investors attentive due to the red numbers of the last days.

August 4, 2021, | AtoZ Markets-Oil prices have yet to catch their breath and remain in the red for the third consecutive day. This important commodity has erased last week’s gains.

Currently, the Brent benchmark is trading around $ 70.80 and has as the next important support to consider the $ 69.50 level. WTI reference maintains a current price of $ 68.28 per barrel. The WTI reference decrease so far this day by 2.30%.

Oil is a commodity that is driven by global fears. At the moment, its key issue is the world’s economic recovery.


WTI Oil Inventories Are a Problem in the US

Also, The Energy Information Administration said U.S. crude inventories rose by 3.6 million barrels in the week ended July 30. However, gasoline inventories fell by 5.3 million barrels. Also, the agency report distillate stocks were up 800,000 barrels.

“With refinery runs anchored below 16 million barrels per day for a second consecutive week and exports dropping, we’ve seen crude inventories show a surprise build,” said Matt Smith, director of commodity research at Clipper Data.

The Nymex front-month crude contract for September delivery was recently down 2.2% at $69.02 a barrel. Crude-oil stockpiles rose by 3.6 million barrels to 439.2 million barrels, and are now about 6% below the five-year average, the EIA said.

U.S. crude oil production remained flat from the previous week at 11.2 million barrels a day, according to the EIA.

Fears About Economic Recovery Impact Oil Prices

Prices are facing pressure as the spread of the delta variant of the coronavirus stokes concerns about the outlook for oil demand, particularly in China.

The world’s second-largest economy has made headlines about new Covid-19 outbreaks in its cities.

China on Tuesday ordered mass coronavirus testing in Wuhan, and Beijing’s top transportation official cut off travel into the capital to protect it from exposure to the virus, The Wall Street Journal reported.

On the other hand, Janet Yellen said today “We’ve grown used to America as the world’s pre-eminent economic power. We aren’t destined to stay that way, but with these investments, I believe we will,”. Yellen said remarks obtained by CNBC.

Also, Yellen remark that “enacting Biden’s agenda is key to keeping the U.S. the ‘world’s pre-eminent economic power”.

Reuters Survey

It followed a Reuters poll, in July 2021, OPEC’s oil production rose to its highest level since April 2020 after the group eased restrictions on pumping and Saudi Arabia phased out a voluntary cut to its supplies.

According to the survey, OPEC has pumped about 26.72 million barrels per day (BPD), about 610,000 (BPD) more than the revised estimate from June. Production has increased every month since June 2020, except for February.

Carsten Fritsch from Commerzbank said: “Most forecasts still point to strong demand growth in the second half of 2021.

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