Epidemic hits oil demand, international oil prices fall

Original title: Epidemic hits oil demand, international oil prices fall

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Longxun Finance August 26, 2021]With the implementation of more anti-epidemic and restrictive measures, it is difficult to eliminate the market’s concerns about demand recovery. On Thursday (August 26), international oil prices fell. NYMEX crude oil futures fell 1.38% to $67.43

/Barrel; ICE Brent crude oil futures fell 1.19% to 70.43 US dollars / barrel.

The new epidemic fueled by the Delta variant virus is causing people to worry about the strength of the global economic recovery, which has hit

oil

And other commodities. Taking into account the risks surrounding the Delta variant virus, as well as the acceleration of vaccination, it is possible that there will be stop-and-go situations in the second half of this year. It is hoped that the situation will normalize by 2022.

The U.S. Energy Information Administration (EIA) stated that last week

U.S. crude oil

Inventories have fallen for the third consecutive week, while overall fuel demand has risen to its highest level since March 2020. This also helped boost oil prices for the third consecutive day of rising on Wednesday, with a cumulative increase of about 10% in the three days.

EIA data shows that as of the week of August 20, the United States

Crude oil inventory

A decrease of 2.98 million barrels was greater than the expected decline of 2 million barrels; gasoline inventories fell sharply by 2.241 million barrels, far exceeding the expected decline of 1.5 million barrels.

Bob Yawger, head of energy futures at Mizuho in New York, said: “This report has supported the market.” He said that as the summer driving season is about to end, gasoline demand is at a good level.

But the demand situation is not entirely positive for oil prices.

EIA number

It also showed that last week’s distillate stocks, including diesel and heating oil, increased by 645,000 barrels to 138.46 million barrels, which was previously expected to decrease by 900,000 barrels; after 10 consecutive weeks of decline, the US crude oil futures delivery center Oklahoma State Cushing’s crude oil inventories increased by 70,000 barrels last week.

Matt Smith, Head of Commodity Research at ClipperData, said: “The slight increase in refinery refinery volumes and a slight drop in imports caused inventories to fall for the third consecutive week to the lowest level since the end of January 2020,” despite the slight increase in refining activities on the U.S. Gulf Coast. There has been a decline, but the inventory is still decreasing. “

Capital Economics said in a report: “For now, American consumers seem to be getting rid of the spread of the Delta variant virus… However, we seem likely to be close to the peak demand in the United States, which will Oil prices have a restraining effect.”

The increase in oil prices this week was due to a major shutdown in Mexico. Last Sunday, a fire broke out on an offshore platform in the country, killing at least five workers and shutting down production of slightly more than 400,000 barrels per day. The recovery of Mexican production also put pressure on prices. So far, Petroleum Mexico (PEMEX) has resumed production at 71,000 barrels per day, and in the next few hours, it is expected to increase production by another 110,000 barrels per day. Last Sunday, a fire broke out on the platform, killing at least five workers and shutting down production of slightly more than 400,000 barrels per day.

Avtar Sandu, Senior Manager of Commodities Department at Phillip Futures in Singapore, said: “Despite the strong price reversal… but there are still doubts about how the global surge of cases will affect fuel demand. In the short term, the oil market may increase volatility and frequent corrections. .”

UBS Global Wealth Management Investment Director Mark Haefele said that although market volatility appears to continue, we expect that as the global economy continues to normalize, and

The Organization of the Petroleum Exporting Countries is still restricting the supply of crude oil, and oil prices will rise further. UBS expects that the price of Brent crude oil futures will rise to $75 per barrel by December.