OPEC + predicts a supply shortage this year, even if it continues to add production, with a surplus expected in 2022.
Oil was the biggest monthly loss since October, as investors weighed in on the prospect of additional OPEC + production and the recovery of crude production in the US after Hurricane Ida.
West Texas Intermediate fell 1.3% in New York and fell about 7% this month. Although raw producers in the Gulf of Mexico are expected to resume service gradually after Ida crashes ashore in Louisiana, local refineries may return more slowly.
Data in Asia, meanwhile, show the impact of the delta variant outbreak in recent months. The service sector in China has shrunk, while production figures have almost missed estimates. Oil demand in Japan in July was about 8% lower than in 2019, according to Bloomberg calculations from government data.
The Organization of Petroleum Exporting Countries and its allies are meeting on Wednesday to assess the world market and the prospects for the demand for the pandemic. The alliance predicts a supply shortage this year, even if it continues to add production, although a surplus is expected to return in 2022.
Oil has endured a turbulent August, rising and falling on alternating weeks as investors responded to the latest twists in the global health crisis and fluctuations in the US currency. U.S. benchmark crude oil fell this month, although there was a steady stockpile, and some countries, including major importer China, managed to control their outbreaks with delta variants.
There are some pre-OPEC + rides and the realization that Hurricane Ida has a negative impact on demand in the short term, while supply should not be affected, ‘says Ole Hansen, Head of Commodity Strategy at Saxo Bank A / S.
- WTI for delivery in October lost 91 cents to $ 68.30 a barrel by 9:08 a.m. in New York.
- Brent for the settlement in October fell 0.8% to $ 72.84 a barrel.
- The November contract, which was the most active, fell to $ 71.50 a barrel.
Energy companies affected by Ida went on to recover the operations. Colonial Pipeline Co. said it would resume gasoline line 1 and diesel and jet fuel line 2 from Texas to North Carolina on Monday night.
Data on Tuesday showed that Beijing’s restrictions on mobility to control the distribution of the delta variant affect the pace of growth. The official purchasing managers’ index for manufacturing fell to 50.1 from 50.4 in July, slightly below the average estimate in a Bloomberg survey of economists.