Oil prices climbed on July 21, 2021. Despite reports indicating an unexpected surge in US oil inventories last week and a lower demand outlook due to rising COVID-19 infections, it continued gains from the previous session.
Crude futures climbed about 84 cents, or 1.2 per cent, and were trading at $70.19 per barrel at 0840 GMT. It had fallen to a low of $68.63 a barrel throughout the session. On the other side, US West Texas Intermediate (WTI) crude futures rose 84 cents, or about 1.3 per cent, to $68.04 a barrel after falling to $66.44 earlier in the day.
Oil futures were down 0.46 per cent to $69.03, while WTI futures were down 0.51 per cent to $66.86.
Moreover, oil prices fell on July 19 following an agreement by the Organization of Petroleum Exporting Countries and allies, known as OPEC+, to raise supply by 400,000 barrels per month from August through December. This sell-off prompts concerns about increasing the Delta form of the COVID-19 in major countries like the United Kingdom. The United States and Japan would impact demand. Earlier in the day, a projected increase in US stocks influenced prices heavily.
The extended timeline comes as global automakers shift toward less-polluting vehicles. Several of the world’s top economies consider imposing new laws. That laws decrease greenhouse-gas emissions as they transition away from fossil fuels. Last week, the European Union published an ambitious climate plan to ban new combustion-engine cars by 2035. Countries such as China and the United States have already taken action.
According to two market sources quoted by American Petroleum Institute statistics, US crude stockpiles increased by 806,000 barrels for the week ending July 16. Reuters polled several analysts who predicted a significant drop in inventory. Official data from the US Energy Information Administration will be released later on July 21.
According to JPMorgan analysts, global demand in August is likely to average approximately 99.6 million barrels per day, up 5.4 million barrels per day from April. However, they also mentioned: We only estimate 4Q21 demand regaining an additional 330,000 vs a normalized 2019 baseline as colder weather settles in for the northern hemisphere and peak travel season passes.
The black liquid’s losses were part of a broader slump in commodities, including gasoline, copper, and iron ore. On the other hand, the dollar rose slightly on Wednesday, making goods priced in the currency more expensive.