Oil climbs on demand for confidence to hold on despite viral surge – .

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Oil climbs alongside stocks as global demand holds up – .


Oil has risen alongside wider equity gains, with investors optimistic global economic growth will continue even in the wake of the COVID-19 resurgence.
Futures rose 2.7% in New York on Tuesday, the biggest gain in more than two weeks. US and European stocks have hit record highs as economic growth is expected to remain strong. While the delta variant has led to an increase in infections and restrictions on movement, global consumption is expected to support and tighten the market until the end of the year.

“Crude oil is enjoying a strong performance in the US equity markets,” said Phil Streible, chief market strategist at Blue Line Futures LLC in Chicago. “Some investors are also becoming optimistic that the blow to demand by the delta variant spread is easing, even slightly. “

In the short term, however, the spread of the virus in Asia, where many countries are lagging behind in vaccination rates, is a blow to fuel consumption. The resurgence of the pandemic in the United States, especially in states with low vaccine uptake, is also causing concern.

China Petroleum & Chemical Corp., the country’s largest refiner commonly known as Sinopec, is slashing production rates at some plants by 5-10% from previously forecast levels this month, analyst Jean Zou says. at ICIS, researcher on raw materials. -China.

Prices

  • West Texas Intermediate for September delivery rose US $ 1.81 to US $ 68.29 per barrel on the New York Mercantile Exchange.
  • Brent for the October settlement gained US $ 1.59 to end the session at US $ 70.63 per barrel on the ICE Futures Europe exchange.

The number of seats offered by Chinese airlines has fallen the most since the start of the pandemic as the country implemented new restrictions to contain the latest wave, based on data from aviation specialist OAG.

“China’s COVID-Zero strategy means restrictions could continue to widen and tighten, reducing oil consumption,” said Vandana Hari, founder of consultant Vanda Insights. “The delta epidemics are certainly the cause of a reassessment of the anticipated trajectory of the recovery in global demand.

Meanwhile, in the United States, cases of the virus reached the highest weekly level since early February. Gasoline demand fell for the second week in a row, dropping less than 1% to 9.486 million barrels per day in the week ending Aug.6, Descartes Lab said in a survey based on device movements. cellular.

Gasoline consumption in the United States averaged 8.6 million barrels per day in the first half of this year, the Energy Information Administration said in its Short-Term Energy Outlook. Demand from May to July was higher than predicted by the EIA and will continue to grow, averaging nearly 9 million barrels per day in 2022, according to the report.

Other market news:

  • Saudi Aramco has provided a full contractual supply of crude oil to at least nine Asian customers for September sales.
  • The world’s largest oil companies are driving up prices for renewable energy projects, slashing profits from wind and solar farms when they are needed most to avert a climate catastrophe.
  • A fire on a commercial vessel in the port of Latakia in Syria is under control, the state-run SANA news agency reported.



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