· Oil edges lower as spread of delta variant clouds prospects for demand
Oil prices dipped on Wednesday, a fifth day of declines with investors wary about prospects for stronger fuel demand as the use of rail, air and other forms of transport remained constrained amid surging Covid-19 cases worldwide.
Brent crude was down 5 cents or 0.1% at $68.98 a barrel by 0139 GMT, having fallen 0.7% on Tuesday. U.S. oil lost 6 cents or 0.1% to $66.53 a barrel after dropping 1% in the previous session.
India, the world’s third-biggest crude importer, also started sales of oil to state-run refiners from its Strategic Petroleum Reserve (SPR), putting in practice a new policy to commercialize federal storage by leasing out space.
A stronger dollar was also hitting commodities across the board, with metals and precious gold in particular as “equally fragile” as oil, ANZ Research said in a note.
Crude is typically priced in dollars so a pricier Greenback makes oil more expensive, hitting demand.
In the United States, more supply is set to hit the market if official forecasts prove right.
U.S. shale oil production is expected to rise to 8.1 million barrels per day (bpd) in September, the highest since April 2020, according to the government’s Energy Information Administration’s monthly drilling output report.
Crude and gasoline inventories in the United States are expected to have fallen last week, while distillate stockpiles are likely to have risen for a third straight week, an extended Reuters poll showed.
Based on the average estimates of nine analysts polled by Reuters, crude stocks dropped by around 1.1 million barrels in the week to Aug. 13.
· Big Oil’s bid to lure back investors with cash could ultimately fail
The world’s largest oil and gas majors are seeking to lure back investors by returning more cash to shareholders. Market participants, particularly those looking to the long term, remain highly skeptical.
It comes at a time when oil and gas companies are raking in their highest profits since the onset of the coronavirus pandemic amid a sustained period of stronger commodity prices.
Reference: Reuters, CNBC
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