Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Crude Oil Edges Higher; Mixed Covid News

Published 07/27/2021, 10:08 PM
Updated 07/27/2021, 10:08 PM
© Reuters.

© Reuters.

By Peter Nurse   

Investing.com -- Crude oil prices edged higher Tuesday, stabilizing after Monday’s fall on optimism the global demand recovery will overshadow a resurgence in Covid-19 cases.

By 9:35 AM ET (1335 GMT), U.S. crude futures traded 0.2% higher at $72.03 a barrel, while the Brent contract rose 0.2% to $73.81.

U.S. Gasoline RBOB Futures were up 1.1% at $2.3022 a gallon.

New Covid-19 cases have been rising in a number of countries, particularly in France, Germany and Italy, and most importantly they hit their highest since March in the U.S. at over 88,000 on Monday. 

However, there have also been some positive signs regarding the virus as well, with  the U.K. and the Netherlands again reporting sharp declines in new cases, while the infection curves in Spain and Portugal flattened further.

Crucially, demand for energy has remained strong in key energy consumers such as the U.S., and China has helped to drain stockpiles that built up during the pandemic.

In fact, the Texas power grid operator on Monday forecast demand would reach a record high over the next week as homes and businesses seek the cool provided by air conditioners with a heatwave settling over the state, the second most populous in the U.S..

Later in the session the American Petroleum Institute will release its latest estimate of U.S. crude oil stockpiles, after stocks increased last week for the first time since the middle of May.

Away from the issues surrounding Covid, and with the Organization of the Petroleum Exporting Countries and their allies having decided upon supply levels for the foreseeable future, the major issue affecting the market is likely to be the issue of Iranian supply.

The election of a new hard-line Iranian president has lessened market expectations of an immediate nuclear deal which could result in the additional supply of Iranian crude into the global market.

“Noise around the nuclear deal has quietened down more recently, and we will have to wait until the new Iranian president takes office in August before indirect talks resume,” said analysts at ING, in a note.

“We will continue to assume Iranian oil supply at 3MMbbls/d by the end of this year, however, will revisit this forecast once talks resume.”

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.