Analysts: The effect of “Delta” on oil is short-term… The decline...

Oil prices returned to rise, supported by data on the decline in US oil inventories for the fourth week in a row, which renewed optimism that global demand for crude could recover at a better pace, despite the enormous pressures it is exposed to due to the rapid spread of the delta variable from the Corona virus globally.
And crude prices in the European market recorded yesterday, an increase for the first time in five days, after preliminary data by the American Petroleum Institute showed a decrease in stocks in the United States, as American crude rose by 0.9 percent, to $ 67.22 a barrel, from the opening level of $ 66.65, and recorded the lowest A level at 66.43 dollars, while Brent crude rose by 1.25 percent, to 69.78 dollars a barrel, from the opening level at 68.92 dollars.
Oil analysts told Al-Eqtisadiah, “The decline in inventories provided good support for prices, which led to an increase in crude oil futures contracts, but the upward trend is facing resistance with the increasing strength of the dollar and the prevailing concerns about the spread of the variable delta.”
And they expected that the monthly “OPEC +” increase in production, which was implemented in August, amounting to 400,000 barrels per day, will be subject to review during the next monthly meeting of the group’s energy ministers on the first of next September, unless the year’s prices regain price gains, Doubts about the recovery of demand are dispelled.
In this context, Dr. Philippe Debisch, head of the European Energy Initiative, says, “Oil prices are resisting the downward trend and have received good support from the shrinkage of crude oil and gasoline stocks in the United States, while Chinese demand and refinery activity remain affected by the pressures of the epidemic, as statistics indicate that the treatment of oil The daily crude oil in July fell to its lowest level in about 15 months.
He pointed out that the weak economic data in China expanded its effects on prices in light of fears of faltering growth in the second largest energy consuming economy in the world, and this was accompanied by the rise of the US dollar, which has an inverse relationship with oil prices, explaining that the spread of the delta variable led to the curtailment of desire At risk on commodity prices.
Goran Geras, assistant director of ZAF Bank in Croatia, believes that the shrinkage of oil stocks has boosted optimism for a recovery in demand, but the epidemiological situation and the rise of the dollar – on the other hand – increased pressure on prices, explaining that the outbreak of the delta variable created a case of significant downside risks in The oil market, but many analytical circles believe that the effect of the delta variable will be short-lived.
He explained that the gains returned to the market as soon as the data of the decline in US stocks was announced, which reflects the improvement in demand indicators and the reduction in fears of the epidemic, in addition to the possibility that the “OPEC +” group will postpone some monthly increases to provide the largest possible support for the balance of supply and demand and stop losses.
For his part, Andrew Morris, director of the international consulting firm Bowery, says, “The US demand situation is good, and this was evident in the shrinking stocks and the continuation of the driving season and the movement of travel and aviation,” considering the adverse pressures that are currently centered on the weak data from China, which is still a source of concern. Movement in major cities such as Beijing has been restricted by authorities trying to curb the outbreak.
He pointed to the ability of global demand to overcome the stumbling associated with the epidemic, pointing to data issued by the “Goldman Sachs” group confirming that the decline in prices still reflects the state of concerns about the impact of the “delta” variable on oil demand, especially in China and in many emerging markets. He considered the situation of weak demand to be temporary and transitory, especially in light of broader challenges facing the market in the long run, most notably the increasing clarity of the lack of investment in upstream projects, which affects the stability of supply and the situation of oil supplies in the future.
“The global demand for crude oil was supposed to achieve broader gains, were it not for the pressures and the weak economic data that came from China, which is the main engine of global demand,” Mwahi Kwasi, managing director of the International Company, told The Economist, stressing that Beijing is able to overcome The current stumble, just as it succeeded in being proactive in controlling the epidemic in its first previous waves, as it was one of the first countries to lift restrictions and control the spread of new infections thanks to its extensive experience in dealing with epidemics.
She pointed out that the “OPEC +” group led by Saudi Arabia and Russia has maintained the path of easing production restrictions imposed in the first phase of the epidemic, as oil supplies are currently being raised by 400,000 barrels per day this month, and the matter may extend to the subsequent months according to the plan established, with Apply flexibility in accommodating the successive developments and changes in the oil market.
In preliminary data, the American Petroleum Institute announced on Tuesday that commercial stocks in the country decreased by 1.2 million barrels during the week ending on August 13, in the fourth consecutive weekly decline, exceeding experts’ expectations for a decrease of 1.1 million barrels.
According to these data, the total commercial stocks in the United States decreased to about 438.5 million barrels, which is the lowest level since the week ending February 7, 2020, in a strong sign of the levels of withdrawal and demand in the largest consumer of fuel in the world, and expectations indicate the US Energy Agency. Inventories decreased by 1.5 million barrels.
On the other hand, the OPEC crude basket declined, and its price reached $69.40 a barrel on Tuesday, compared to $69.65 a barrel the previous day.
The daily report of the Organization of Petroleum Exporting Countries, OPEC, said on Wednesday, “The price of the basket, which includes average prices of 13 crudes from the production of member countries of the Organization, achieved its third decline in a row, and that the basket lost about one dollar compared to the same day last week, when it recorded 70.13 dollars per barrel.