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Oil Is In A Holding Pattern Today, Waiting For Demand

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Incoming reports have indicated that crude oil has stabilized today. This was due in-part to the recent outcomes from the OPEC meeting which reassured many that recovery is imminent. Certainly this was marred slightly by the far reaching consequences of lockdowns spanning across countries such as Australia and Spain. Brent crude futures were up at the time of this writing by about 8 cents, or 0.1%, at $74.76 per barrel, after having fallen 2% on Monday. U.S. West Texas Intermediate (WTI) crude futures were also up by slightly less at about 7 cents, concluding at $72.98 a barrel. OPEC Secretary remarked that the initial prediction for 2021 oil demand had been steady at around 7 million barrels per-day, which would have been an increase from the 5 million BPD marker seen earlier.

“The current ‘wild card’ factor is the ‘Delta Variant’ of the pandemic that is resulting in rising cases and renewed restrictions in many regions,” the Secretary told reporters as quoted by MetaNews.

The JTC of OPEC+ is expected to dramatically increase production soon to accommodate an impending shortfall that they have predicted to settle in for August.

Their demand predictions show that in Q4, global oil supplies will fall behind demand by more than 2 million BPD, meaning there should be some consensus over spreading the wealth around. Spain and Portugal, which have provided European’s holiday refuge for decades have reinstated lockdown protocols that have severely limited demand for travel fuel consumption. Australians have done similarly in an effort to stop or severely limit the transmission of the newly discovered Delta variant of COVID.

We should all definitely be paying attention to new U.S. Energy Department oil inventory data in the coming days, like tomorrow especially. Futures rose in after-market trade after industry data released today showed U.S. crude oil inventories fell last week while fuel hoards rose, according to a few sources MetaNews is in contact with. Incoming reports have indicated that crude oil has stabilized today.

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Billy Houghton

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