On Wednesday (July 21), international oil prices rebounded technically, but the unexpected increase in US API oil inventories last week continued to aggravate people’s concerns that the epidemic’s counterattack might curb fuel demand. Investors are waiting for official U.S. Energy Information Administration (EIA) data.
At 15:41 Beijing time, NYMEX crude oil futures rose 0.31% to US$67.41 per barrel; ICE Brent crude oil futures rose 0.32% to US$69.57 per barrel.
NYMEX crude oil and Brent crude oil refreshed their lows since May 24 to $65.01/barrel and their lows since May 24 to $67.44/barrel respectively overnight.
ING Economics analyst report said: “The market was under some downward pressure this morning after the American Petroleum Institute (API) issued a bearish and rather surprising inventory report.”
According to data released by the American Petroleum Institute (API), as of the week of July 16, crude oil inventories increased by 806,000 barrels. Analysts had previously estimated that the data would be reduced by 4.167 million barrels. If the EIA data to be released at 22:30 on Wednesday, Beijing time confirms the increase in US crude oil inventories, if this is the case, it will end eight consecutive weeks of inventory reduction.
Commonwealth Bank of Australia analyst Vivek Dhar said: “Today’s and possibly tomorrow’s price trends will be driven by US oil inventory data, but the biggest subject matter will be OPEC+’s agreement to increase 400,000 barrels per day per month, and the Delta variant virus. Can demand be maintained during the spread?”
The Organization of the Petroleum Exporting Countries and its partners (collectively referred to as OPEC+) reached an agreement to increase supply from August to December by 400,000 barrels per day, thereby triggering a sell-off in the oil market this week, and demand concerns intensified The market is bad.
Although fuel demand has improved during the summer peak period, the surge in infections with the new crown mutant strain Delta is affecting the demand outlook. The number of people infected with Delta is on the rise in major markets such as the United States, the United Kingdom, and Japan.
Vandana Hari, an energy analyst at Vanda Insights, said: “Worries about the Delta variant virus firmly control the sentiment in the oil market, putting a big question mark on the topic of a demand rebound in the past few weeks. Crude oil prices may be slightly in the next few days. Rising, but it is difficult to see oil prices soar in the short term.”
JPMorgan Chase analysts said in a report that although global demand is expected to average 99.6 million barrels per day in August, an increase of 5.4 million barrels per day from April, “but as the weather in the northern hemisphere turns colder and the tourist season fades, we expect The demand in the fourth quarter of 2021 will only increase by 330,000 barrels per day from the normal baseline in 2019.”
Goldman Sachs on Tuesday lowered its third-quarter ICE Brent crude oil price estimate to $75/barrel, which was $5 lower than its previous estimate, as the surge in new crown cases of the Delta variant affected demand. The bank currently forecasts a supply gap of 1.5 million barrels per day in the third quarter, compared with the previous forecast of 1.9 million barrels per day.
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