London +4420 814 42225
Moscow +7495 543 9194
Kiev +38044 599 2950

Our Clients

Order Informer

Home > News >

Crude oil resumes downward trend on COVID-19 pandemic and supply concerns

July 21/2021

MOSCOW (MRC) -- Oil dropped towards USD68 a barrel on Tuesday, extending the previous session's steep slide, pressured by concern that rising COVID-19 infections could weaken demand again just when OPEC+ is increasing supply, reported Reuters.

Monday's selloff had pushed oil to a two-month low and hit other riskier assets. While equities avoided a new selloff on Tuesday, US.Treasury and German bond yields also slipped as a reminder that investors remained worried.

"As things stand, it is hard to see prices staging a comeback unless virus jitters are brought back under control," said Stephen Brennock of oil broker PVM.

"The market is clearly unsettled about the demand outlook."

Brent crude fell 23 cents, or 0.3%, to USD68.39 a barrel by 1353 GMT, having slid by 6.8% on Monday. U.S. crude for August , which expires later on Tuesday, was down by USD1.19, or 1.8%, at USD65.23 after falling 7.5% on Monday. The September US crude contract was down 1.6% at USD65.31.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, agreed on Sunday to increase output from August, unwinding more of the supply curbs put in place when the pandemic struck last year.

The Delta coronavirus variant is now the dominant strain worldwide, US officials said on Friday. Still, Julius Baer analyst Carsten Menke said it was unlikely to jeopardise the recovery of global growth, though it could cause "regional hiccups".

The coronavirus concerns outweighed support from tight oil supply in the near term. Crude inventories in the United States are expected to fall for a ninth week. OPEC, meanwhile, expects global oil demand to grow by 6.6% in 2021.

"Global demand still appears to be recovering dynamically, so the oil market should end up in supply deficit in the coming months despite the production hikes to be implemented by OPEC+," said Eugen Weinberg of Commerzbank.

As MRC informed earlier, Saudi Arabia, the world's top crude oil exporter, will supply full contractual volumes of August-loading crude to at least five Asian customers. However, Saudi Aramco has turned down two of the buyers' requests for extra barrels.

We remind that Mukesh Ambani, chairman and managing director of Reliance Industries Ltd (RIL), said in June he expects the company's deal with Saudi Aramco to materialise this year. Meanwhile, Yasir Al-Rumayyan, chairman of Saudi Aramco and the Governor of the Public Investment Fund, joined the board of Reliance as an independent director.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
Author:Margaret Volkova
Tags:Asia, crude and gaz condensate, medicine, Reliance Industries, Saudi Aramco, Saudi Arabia, USA.
Category:General News
| More

Leave a comment

MRC help


 All News   News subscribe