Oil prices drop slightly, but seek to end volatile week little changed

Oil futures fell slightly on Friday, after a three-session rise that allowed prices to rebound from Monday’s decline to the lowest settlements since May.

“Traders weren’t sure whether the OPEC + deal was bullish, representing continued cohesion, or bearish, signaling more oil in the market,” Michael Lynch, president of Strategic Energy & Economic Research, told MarketWatch. The Organization of the Petroleum Exporting Countries and their allies, known together as OPEC +, on Sunday decided to gradually increase production levels each month from August.

“Traders were unsure whether the OPEC + deal was bullish, representing continued cohesion, or bearish, signaling more oil in the market.”

– Michael Lynch, Strategic Energy and Economic Research

Read: OPEC + Provides Oil ‘Supply Cushion’ As Coronavirus Delta Variant Threatens Demand

Meanwhile, the spread of the delta variant of the coronavirus is “apparently bearish, but demand data, at least for the United States, remains bullish,” Lynch said. This “gives you a prize on the swing”.

Crude West Texas Intermediate for delivery in September CL00,

fell 12 cents, or 0.2%, to $ 71.79 a barrel on the New York Mercantile Exchange, leaving the U.S. benchmark on track for a weekly loss of 0.1%, based first month contracts.

September Brent gross BRN00,
+ 0.16%

+ 0.16%,
the global benchmark, was down 15 cents, or 0.2%, to $ 73.64 a barrel on ICE Futures Europe, leaving it up less than 0.1% for the week.

Crude dipped on Monday, with WTI falling more than 7%, in a broad sell-off that was attributed in part to concerns about the spread of the delta variant of the coronavirus and its impact on energy demand. Crude and other assets, including equities, subsequently rebounded, posting gains for three consecutive sessions as investors were keen to buy the downside.

The market rebound “confirms our hypothesis that the liquidation was ultimately triggered by external factors,” Eugen Weinberg, commodities analyst at Commerzbank, said in a note.

Weinberg said he also supports the hope that the OPEC + deal adding 400,000 barrels per day each month to production as he loosens production restrictions will prevent a repeat of the collapse of the cartel. from last year.

“The supply situation remains tight, while the deal underscores the unity of OPEC +, and the response of non-OPEC + producers so far to significantly higher prices leaves a lot to be desired,” he said. -he writes. “This suggests that OPEC + will maintain its pricing power, which will lead to high prices.”

Energy Information Administration data released Wednesday revealed a weekly increase in crude supplies to the United States, after eight straight weeks of decline, but inventories at the country’s storage facility in Cushing, Oklahoma, fell to their low. lowest since January 2020.

On Nymex Friday August gasoline RBQ21,
+ 0.58%
fell 0.3% to $ 2.27 a gallon, with prices up about 0.5% for the week. HOQ21 August fuel oil,
fell 0.3% to nearly $ 2.13 a gallon, heading for a weekly gain of 0.6%.

August NGQ21 natural gas,
was trading at $ 4.03 per million British thermal units, up 0.8% and set to mark another high since December 2018. For the week, prices rose 9. 8%.

Read: Why the natural gas market could run out of supply this winter

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