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Crude prices continue rising on weaker US dollar and tightening inventories

July 30/2021

MOSCOW (MRC) -- Crude prices extended their rally July 29, settling higher on the back of a weaker US dollar and tightening inventories, reported S&P Global.

NYMEX September WTI settled USD1.23 higher at USD73.62/b and ICE September Brent moved up USD1.31 to USD76.05/b.

Oil futures gleaned support from a weaker US dollar and rising risk appetite supported by a dovish tone taken by US Federal Reserve chairman Jerome Powell, analysts said.

"Oil prices are surging as risk appetite runs wild following disappointing economic data that solidifies the view that the Fed won't be slowing down its ultra-accommodative stance anytime soon," OANDA analysts said in a July 29 note.

"Strong earnings and a cautious US central bank bodes well for crude, which saw the rally slow heading into Fed day," they added. "The biggest downside risk to oil prices now is unsurprisingly the delta variant rapidly spreading and weighing on the economic recovery going into the end of the year."

NYMEX August RBOB settled 4.32 cents higher at USD2.3514/gal and August ULSD climbed 3.34 cents to USD2.1894/gal.

Powell, during a press conference following a July 28 Federal Open Markets Committee meeting, indicated the US economy had farther to go before easing the Fed's current supportive stance. The comments proved bearish for the US dollar, which in turn is supportive for crude prices.

The ICE US Dollar index fell to 91.86 in afternoon trading, on pace for the lowest close since June 25.

Meanwhile, US crude supply outlooks remain bullish following a 4.09 million-barrel inventory draw in the week ended July 23 and a decline in drilling activity.

"Sentiment was buoyed by falling inventories across several markets and an easing of fears that the recent surge in COVID-19 cases would hurt demand," ANZ analysts said in a July 29 note.

"The falls suggest the rise in cases of COVID's delta variant is having little impact on mobility. While health authorities remained concerned about its spread, the high level of vaccination has prevented widespread restrictions," the ANZ analysts said in the note.

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, India, Saudi Arabia, USA.
Category:General News
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