Abstract:Oil has had a volatile August with the fast-spreading delta variant of the virus leading to renewed restrictions on mobility and clouding the outlook for fuel demand.
Oil has had a volatile August with the fast-spreading delta variant of the virus leading to renewed restrictions on mobility and clouding the outlook for fuel demand. OPEC+ is scheduled to meet next week after agreeing to keep adding supply until all of its production curbs are revived, and the market will be watching for any change to its guidance.
Three of the Feds leading hawks urged policy makers move quickly to slow asset purchases despite the risk of delta. The dollar held a gain. A stronger U.S. currency makes commodities such as oil less attractive to investors.
Oil and gas explorers in the U.S. Gulf of Mexico including BP (NYSE:BP) Plc and Royal Dutch Shell (LON:RDSa) Plc have begun shutting production ahead of Ida. Based on the latest forecast by the National Hurricane Center, the storm will be at least a Category 2 hurricane by the time it makes landfall near New Orleans.
The prompt timespread for Brent was 93 cents a barrel in backwardation -- a bullish market structure where near-dated contracts are more expensive than later-dated ones. That compares with 38 cents on Monday.
Oil prices drifted lower on Friday, wiping out gains from the previous session, as the dollar continued to rise on bets the U.S. central bank will bring forward plans to raise rates to tame inflation.
Oil gained at the start of the week’s trading on signs that the crude market is tightening because of the global energy crunch.
Oil steadied as September opened, with traders counting down the hours until an OPEC+ meeting that should result in a further rise in output.
Oil headed for a substantial weekly loss, hurt by the Federal Reserve’s move toward tapering asset purchases, a rally in the U.S. dollar and concerns about global energy demand.