“OPEC +” warned of increased production proved true. The epidemiological situation...

Crude oil prices tended to decline again after data on a sudden increase in gasoline stocks in the United States, which exacerbated concerns about global demand for fuel, especially in light of the continued rise in infections with the delta variable from the Corona virus at the international level.
Prices recorded the longest wave of losses since February of last year, after a decline for the sixth consecutive day, while the “OPEC +” group is preparing for a decisive monthly meeting in early September to review market developments, and some expectations go to the possibility of production stabilization due to the noticeable faltering of demand in light of renewed epidemiological situation.
Specialists and oil analysts told Al-Eqtisadiah, “The current developments in the market have proven the safety of the vision of “OPEC +” led by Saudi Arabia and Russia, with the need to be careful and wait for a sustainable and stable recovery in demand,” expecting that the next meeting will not witness any desire from producers to increase production, especially since the epidemiological situation is severe. Complexity and varying in assessments.
In this context, Mofeed Mandra, Vice-President of the Austrian LMF Energy Company, stated that the widespread uncertainty surrounding demand is behind recording the longest wave of losses since February of last year, considering that exit from it depends on achieving tangible progress in controlling the exacerbation of infection with a variable. Delta.
He added that “the weak demand came in conjunction with the approaching end of the peak driving season in the United States,” noting the negative impact of the rise in gasoline stocks, despite the presence of corresponding data on the contraction of crude oil stocks, as reports indicated that 3.23 million barrels were withdrawn from commercial crude stocks. But it did little to offset investor pessimism.
In turn, Vittorio Musazi, director of international relations at the Italian energy company Sanam, believes that market sentiment is not at its best and is dominated by a downward trend, and that demand stumbles in exchange for the continued strengthening of supply reinforces concern about the continued deterioration of prices, pointing out that the market is currently focusing more on demand expectations. global over the next few months and its impact on crude oil prices.
He pointed out that the global epidemiological situation is very complex and varies in assessments from one side to another, but the continued spread of the delta variable predicts the survival of the work system associated with the epidemic, including virtual meetings and remote work, and the delay in approving vaccines for younger children – before the start of School year – to the continued suffering of demand.
For his part, Alexander Bogle, a consultant at GBC Energy International, said, “US demand in particular is facing broad pressures after the number of cases of the delta variant remained stubbornly high, despite the ongoing intensive vaccination campaigns in the country.”
He pointed out that, on the other hand, the increases in supplies from the “OPEC +” group remain limited, cautious and under control and continuous review, with the possibility of adjusting them at each monthly meeting of the group, which is preparing for a critical meeting in early September, while one of the bright spots in the prospects for oil supplies remains represented in An increasingly unlikely return of Iranian oil in the near term, given the lack of progress in nuclear talks.
In turn, Winnie Akilo, an American analyst at African Engineering International, explained that the rise of the US dollar to its highest level in nine months represents enormous pressures on crude oil prices according to the inverse relationship between them, and the WHO’s warning of a wider spread of the epidemic in countries experiencing rates Low vaccination led to wide negative effects in demand and in market sentiment and expectations in the coming period, and led to the continued bleeding of oil price losses.
She pointed out that the next “OPEC +” meeting may be completely different from the previous meeting, and it may not witness pressure from producers and a rush to achieve the desire to increase production, after the developments demonstrated the safety of the “OPEC +” vision led by Saudi Arabia and Russia of the necessity of caution and waiting for a sustainable and stable recovery in demand. global crude oil.
On the other hand, with regard to prices, oil fell to $66 a barrel yesterday, the lowest level since May, under the weight of fears of weak demand with the increase in Covid-19 infections, the rise of the US dollar and a sudden jump in US gasoline stocks.
The World Health Organization has warned of the spread of the mutated Delta strain of the Corona virus in areas where vaccination rates are declining. And deaths related to the Corona virus in the United States increased over the past month.
Brent crude was down $2.10, or 3.1 percent, to $66.13 a barrel, after touching its lowest level since May 21.
US West Texas Intermediate crude fell $2.28, or 3.5 percent, to $63.18 a barrel, after falling to $62.96, which is also the lowest level since May 21.
Both Brent and US crude have been falling for six consecutive days, in the longest losing streak since a six-day decline for both contracts, which ended on February 28, 2020.
“Fears of weak demand expectations due to the increase in coronavirus cases around the world contributed to the decline,” said Naim Aslam of brokerage Ava Trade.
A sudden rise in US gasoline stocks last week also raised concerns about slow demand, especially since the northern hemisphere summer is the time when demand for fuel is usually peaked.
The US Energy Information Administration said Wednesday, “Gasoline stocks rose 696,000 barrels to 228.2 million barrels,” while analysts expected a drop of 1.7 million barrels. But the administration also said that US crude stocks fell by 3.2 million barrels last week to 435.5 million, the lowest level since January 2020.
The dollar’s rise is adding to pressures, as it rose amid expectations that the US Federal Reserve will begin to scale back its stimulus program this year. A stronger dollar makes oil more expensive for holders of other currencies and usually affects prices.
On the other hand, the OPEC crude basket declined, recording a price of $69.42 a barrel on Wednesday, compared to $69.40 a barrel the previous day.
The daily report of the Organization of Petroleum Exporting Countries, OPEC, said, “The price of the basket, which includes average prices of 13 crudes from the production of member countries of the Organization, achieved its fourth consecutive decline, and that the basket lost about one dollar compared to the same day last week, when it recorded $70.52 barrel”.