Business

Oil stabilizes after losses for 3 sessions, driven by “Delta” threats

Amman Today

publish date 2021-08-17 11:04:00

Jordan word

Crude oil prices stabilized, Tuesday morning, after a three-day decline that was driven by the growing threat to demand from the spread of the delta variable of the Corona virus.

US West Texas Intermediate crude was trading near $67 after losing nearly 3% over the previous three sessions. The benchmark Brent crude is trading below $70.

US gasoline consumption fell for a third week, according to a survey by Descartes Labs, while data from China revealed a slowdown in economic activity in the world’s largest oil importer during July. Meanwhile, demand in India, another major oil consumer, remains largely resilient.

After a sharp rally in the first half, the rally in crude oil was capped in July and August. The delta variable has caused new restrictions on movement in many countries including China, which is hurting energy consumption. Against this backdrop, JPMorgan lowered its oil price forecast.

While demand is facing challenges, the Organization of the Petroleum Exporting Countries and its allies, including Russia, have maintained a path of easing production restrictions imposed in the first phase of the epidemic. Daily supply will rise by 400,000 barrels per day this month. The group’s next regular meeting is scheduled for September 1, and follows a call from US President Joe Biden earlier this month to pump more production to lower gasoline prices.

Monday’s drop in crude oil mirrored concerns about delta’s impact on demand, according to Goldman Sachs Group Inc. However, this challenge will be fleeting, as the bank said it is sticking to its forecast that Brent crude will reach $80 a barrel in the next quarter, amid a persistent market deficit.

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Jordan Business

Source : ألدستور

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