Dow Jones and Standard & Poor’s set records .. and oil continues to decline

Dow Jones and Standard & Poor’s set records .. and oil continues to decline: Oil started the week by further decline,
with Brent crude losing $70, and currently trading at $69 per barrel.

Evest follows trading developments in the following lines.

Oil started the week with a new decline

Oil prices declined at the end of the week, and this morning continued to show negative dynamics due to the spread of the delta strain of the coronavirus.

Disease statistics are worrying, with a number of countries resuming lockdowns.

This poses a threat to the recovery of fuel demand.

Brent crude futures are trading again below $70 a barrel this morning.

After rebounding from three-month lows, prices declined again.

October futures for the North Sea oil mix Brent fell by $0.77 to $69.82,
and September futures for the WTI crude – by $0.76 to $67.68 per barrel.

Goldman Sachs bank

The investment bank Goldman Sachs commented on the US administration’s call for OPEC + to increase production.

According to Bank experts, the Alliance will not review its plans to increase production amid the rapid deployment of Covid-19.

Earlier in 2021, Goldman Sachs Bank’s forecast was among the most accurate on the major investment banks.

Since the beginning of the year, the Bank has been optimistic about oil prices, setting a top target of $55 per barrel.

At the same time, by the end of the first quarter, the Bank had already recognized the growth of summer price quotations to $70-80 per barrel.

This accuracy can increase market participants’ confidence in the Bank’s future expectations,
although previous success does not at all guarantee that the Bank’s prediction models will continue to show such accurate results.

Meanwhile, oil producers remain committed to the planned increase of 2 million barrels per day by the end of the year.

In general, Goldman’s analysts maintain an optimistic outlook on oil,
although short-term projections for the deficit have been adjusted from 2.3 million barrels per day to 1 million barrels per day.

last week

At the end of last week, the Brent crude price fell 1.40% to $70.13.

The price fell slightly amid an IEA warning that the spread of different strains of coronavirus is slowing oil demand growth.

The International Energy Agency notes that demand for crude oil ceased to grow in July,
and will grow at a slower pace until the end of 2021 due to the sharp increase in the number of cases of the delta variant of the coronavirus.

Today

Today, oil is traded in the Red Zone because of poor Chinese statistics.

The unemployment rate rose in July to 5.1% compared to 5% earlier (forecast was 5%).

Retail sales in July rose 8.5% from 12.1% earlier (forecast was 10.9%).

Industrial production in July was 6.4% compared to 8.3% earlier (forecast was 7.9%).

The data are part of the coronavirus outbreak wave that is occurring in the country,
as well as other neighboring countries such as Thailand, Vietnam, and the Philippines.

It’s all at a time when the delta variable is gaining strength. The prices decline may accelerate with the opening of trading in Europe.

Oil is an asset highly vulnerable to economic rhythm because of its association with energy consumption in terms of retail and macroeconomic production.

On the other hand, the market is already feeling the impact of the OPEC + production agreement in July,
through which producer countries committed to increasing pumping by 400 thousand more barrels a day every month until December, in order to curb price increases.

Baker Hughes provided new data on drilling activity in the United States on Friday.

The number of active oil rigs jumped to 397 units (+ 10 sets).

This is the biggest weekly gain in the last three months.

Canada also experienced growth with 100 installs.

Drilling activity is gradually recovering, but the pace does not allow us to predict that production in the United States
will be able to significantly exceed expectations of 11.4 million barrels per day by the end of the year (EIA estimate).

Record rallies on Wall Street

In the United States, stock indices rose by 0.04-0.2% on Friday, while the Dow Jones (+ 0.04%) and Standard & Poor’s 500 (+ 0.2%) showed the longest series of indices since March 15.

The University of Michigan’s Consumer Sentiment index fell in August to its lowest level since December 2011 at 70.2 points,
while experts expected no change from the July level of 81.2 points.

Negative dynamics in Asia

In Asia, the negative dynamics of stock indices prevail on Monday.

Japan’s Nikai 225 index fell 1.6%, China’s Shanghai Composite Index fell 0.1%, Hong Kong’s Hang Seng Index fell 1.3%, and U.S. stock futures (S&P 500 fell 0.4%).

The Asian market is under pressure from the continued rise in Covid-19 cases in the region with insufficient vaccination.

Among the countries that set infection records for several consecutive days are Japan, Thailand, Malaysia, Vietnam,
and the Philippines, close to the counter-records.

The Chinese market supports hopes that Beijing will take action to stimulate the economy in the face of weak growth momentum.

China’s statistics, released on Monday, indicated that industrial production and retail sales in the country slowed in July due to a new wave of restrictive measures introduced in several regions of the country due to the spread of Kovid-19.

Thus, the industrial production volume increased by 6.4% from the same period last year,
at its lowest rate in 11 months, compared to 8.3% in June.

The increase in retail sales slowed last month to 8.5% on an annual basis from 12.1% in June.

Dow Jones and Standard &#038; Poor&#8217;s set records .. and oil continues to decline

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Dow Jones and Standard & Poor’s set records .. and oil continues to decline