A positive beginning of the week in Asia.. Oil is losing more value

A positive beginning of the week in Asia.. Oil is losing more value: This week begins with downward dynamics of oil prices,
which seem to still be affected by the absence of a joint view on production by OPEC members. 

Evest follows what happened at the beginning of this week in the commodity trading market, in the next report. 

A slight downward correction of oil prices

Prices are correcting lower this morning, Monday, after a big rise on Friday,
thanks to traders’ optimism about forecasts of energy demand.

Oil prices remained mostly unchanged in morning trading in Asia,
where the stalemate in talks among major oil-producing countries on production increases
in the coming months has led to continued supply,
heightening concerns about the impact of the pandemic on the global economy.

The cost of Brent crude futures for September by 10:01 a.m. was $75.14 per barrel (-0.5% and + 1.9% on Friday),
and the price of West Texas Intermediate crude futures for August delivery was $74.16 per barrel (-0.5% and + 2.2% on Friday).

West Texas Intermediate crude prices rose last week for the sixth week after a report from the U.S. Energy Information Administration
showed the country’s inventories of gasoline and crude oil declined,
while gasoline demand was the highest since 2019.

The decline in prices today was due to concerns about the global economic recovery,
which offset the contraction on the supply side.

the spread of the new Delta strain

Mass vaccinations and increased economic activity in large countries, particularly the United States,
support oil demand despite renewed increases in COVID-19 infections in many parts of the world. 

However, the spread of the new Delta strain,
as well as the absence of an agreement from OPEC + on production volumes since August,
has created uncertainty in the market.

In the final declaration of the G-20 meeting of finance ministers and central bank governor,
announced on Saturday, it was warned that new types of coronavirus variants and disparities in access to vaccines threaten the global economic recovery.

While the rapid spread of the Delta variant around the world is raising concerns about a new wave,
quarantine measures are taken again in many countries and travel restrictions on the agenda are again negatively affecting oil demand expectations. 

Brent and West Texas declined 0.8 last week.

Data from the oil field service company Baker Hughes, published last Friday,
showed an increase in the number of oil production units operating in the United States last week by two – to 378.

The market focuses on monthly IEA and OPEC oil market reports,
which will be published on Tuesday and Thursday, respectively.

On the other hand, the cancellation of the meeting of the Organization of Petroleum Exporting Countries (OPEC) and OPEC Group (OPEC),
made up of some non-OPEC producing countries,
to determine the production policy to be implemented as of August, remains in place. 

Analysts at ANZ believe that continuing production cuts at current levels will tighten the market amid strong demand.

The important U.S. reports ahead this week

According to analysts, in the minutes of the June meeting of the U.S. Federal Reserve released last week,
it became known that some leaders of the U.S. Central Bank see the possibility of a reduction in the size of the Fed’s stimulus
against the backdrop of rapid economic growth in U.S. activity. 

The regulator indicated that it expects the rate to stabilize at the current level in 2021 and increase by 2023,
The next meeting is scheduled for 27-28 July.

Investors are waiting for the release of the first U.S. bank reports to release this week.

Eurozone finance ministers will meet on Monday to discuss fiscal policy for 2022,
and corporate restructuring in a period of post-picture recovery. 

According to experts, the limiting factor of stock price growth is the rapid spread
of the new variant of the delta coronavirus and low vaccination rates in Africa.

The conservative mood of investors amid a still poor news backdrop
and pandemic fears will not allow emerging markets to show steady growth.

The corporate results season for the second quarter of the year is approaching

US financial sector stocks, in addition to commodity stocks, led the rally,
which could be attributed to the approaching second-quarter reporting season. 

So, the reports will be submitted by Goldman Sachs and JPMorgan, on Tuesday.

Citigroup, Wells Fargo, and Bank of America will be submitted on Wednesday. Morgan Stanley, on Thursday. 

The reporting season in the States should be good.

Meanwhile, the turbulent phase of the global economic recovery,
based on a number of indicators, is coming to an end,
so corporate expectations for the future will be very important for investors.

In the United States, stock indexes rose 1-1.3% on Friday and ended trading at record highs,
showing gains for the third week in a row. 

The market recovered from a decline the previous day, backed by concerns about the outlook for global economic growth amid new strains of the coronavirus.

Mary Daly, President of the Federal Reserve Bank of San Francisco (FRB),
told the Financial Times that the spread of the coronavirus delta strain and the slow pace of Covid – 19 vaccines in parts of the world threaten the global economic recovery.

According to her, the U.S. Federal Reserve system plans to adhere to the monetary policy approach adopted in August 2020.

The US Central Bank then unveiled a new strategy that it assumed would strive to achieve an average inflation rate of 2% “within a certain period of time.”

The Fed believes that after periods of constant inflation of less than 2%,
the monetary policy aimed at moderate inflation above 2% will be appropriate.

In the absence of further incentives for market growth, investors are waiting for the start of the second-quarter reporting season
to draw conclusions about the pace of the private sector recovery.

The Standard & Poor’s 500 index profit is expected to rise 63.6% in the second quarter from the previous year,
the highest 12-month rise since the fourth quarter of 2009, according to FactSet.

Positive dynamics in Asia

Positive dynamics for Asian stock indexes prevail on Monday, with Japan’s Nikkei 225 index up 2.3%,
China’s Shanghai Composite – 0.7%, and Hong Kong’s Hang Seng up 0.8٪.

Local authorities said less than two weeks before the opening of the Olympics in the Japanese capital,
an emergency system had been introduced since Monday to prevent the spread of the coronavirus. 

The Tokyo Olympic Games, postponed last year, are scheduled to take place from July 23 to August 8.

The current emergency situation, the fourth in a row in Tokyo, will continue until August 22.

A positive beginning of the week in Asia.. Oil is losing more value