Brent approaching $75.. and the decline undermining the Japanese Stock Exchange

2021-07-29T10:10:46
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Brent approaching $75.. and the decline undermining the Japanese Stock Exchange

Brent approaching $75.. and the decline undermining the Japanese Stock Exchange: Crude oil is trying to advance today,
benefiting from a greater than expected decline in US inventories, as well as an improvement in the epidemiological status in some countries,
led by the United Kingdom. 

Evest follows all this and more in the following report: 

Oil is proceeding again, supported by the decline in US inventories

West Texas Intermediate crude is making modest gains near $72 after two days of decline.

The price of Brent oil for delivery in September was at the US $74.75 per barrel, US $0.27 higher per barrel during the session.

Oil prices rose slightly on July 28, mainly due to investors’ expectation that oil supplies would remain tight because of the caution of oil producers about the prospects for global crude oil consumption.

Despite cautious trading ahead of the Fed’s decision and concerns about rising infections of coronavirus worldwide,
high-yield oil continues to constrain growth.

The price of US crude oil rose by 0.50% during the day and is traded at the US $72.03 in search of new momentum.

Holding on to higher levels, black gold is boosting its spectacular recovery from the two-month low of $65.11 it recorded last week.

Expectations of a reduction in oil supply continue to support speculators at the West Texas Intermediate crude bulls.

This occurred after the American Petroleum Institute (API) announced a greater than expected decline in US crude oil inventories. 

The American Petroleum Institute report showed that US oil inventories fell by 4.7 million barrels in the week ending July 23,
against expectations for a decline of 2.9 million barrels.

Fears of the rapid spread of the Coronavirus

However, looming concerns about the rapid spread of the coronavirus and that the International Monetary Fund (IMF)
has lowered its growth estimates for developing Asia are raising concerns about the outlook for oil demand and its products, which in turn affects oil prices. 

The market is now awaiting a report from the Energy Information Administration (EIA)
on US oil inventories and the Federal Open Market Commission’s decision on new trading opportunities for goods. 

The United States dollar remains high among its major competitors prior to the Fed’s decision.

After signs of decline emerged in the July 27 session, gasoline prices shifted sharply today as investors predicted a supply shortfall
and oil demand improved thanks to the Covid-19 vaccine injection programs.

According to analysts, maintaining high oil prices is what the oil-exporting countries want, and will not be easy to destroy. 

OPEC+’s caution about increasing production after the group’s policy meeting in early July is a case in point.

Announcing an increase in production

Production was announced to increase by 400 thousand barrels per month from August to the end of 2021,
but at the same time, OPEC + also confirmed that it would continue to follow market developments to make appropriate adjustments. 

This means that if the pandemic has a negative trend, demand for crude oil falls​,
and OPEC + can prolong and further reduce production.

Concerns about a possible sharp increase in oil supply with the return of shale oil producers in the United States didn’t go as they had been expected.

In recent developments, UBS Investment Bank (Switzerland) experts have said that crude oil supply will be reduced by strong demand in the summer,
while supply has not improved as expected.

Oil prices have also strengthened economic growth prospects today, with recent forecasts showing that global economic growth is still in a positive direction,
despite negative developments in the Covid- 19 pandemic due to the Delta boom.

Positive signs of prevention and control of the Covid-19 epidemic when the UK just recorded the lowest number of Covid-19 cases in a single day since July 4. 

This raised hope that Europe will soon have the new pandemic under control and pursue open plans to return to the economy.

Currently, investors are turning their attention to US oil inventory reports issued by the official US Energy Information Administration,
to obtain more data on the assessment of the evolution of the oil market. World Energy Consumption Outlook No. 1 economy.

Data from the American Petroleum Institute showed that crude oil inventories fell by 4.7 million barrels for the week ending July 23,
gasoline inventories fell by 6.2 million barrels, and distillation output inventories fell by 1.9 million barrels.

Japanese Stock Exchange declines after three consecutive sessions of the rally

After three sessions of the rally, the Tokyo Stock Exchange fell from its highs on Wednesday,
again worried about Covid – 19 in Japan and frantic ahead of the results of the US Federal Reserve Board meeting later in the day. 

The main Nikkei fell by 1.39% to 27581.66 points, after widening its losses in the afternoon,
and Topix’s expanded index lost 0.95% to 19,119.65 points.

Tokyo, which is currently hosting the Olympic Games behind closed doors, recorded 2848 new cases of Covid-19 on Tuesday,
unheard of since the pandemic emerged more than a year and a half ago.

This figure, which more than doubled in seven days, could have been amplified in part by unreported
cases over the four-day weekend (from last Thursday to Sunday) marking the opening of the Olympics. 

The New York Stock Exchange was also closed on Tuesday, especially its Nasdaq index,
with strong technological performance, while waiting for the Fed.

In China, the Hang Seng index recorded a small recovery, after two sessions of collapse
due to Beijing’s new regulatory tightening that affected various sectors of activity.

While the Shanghai Composite Index and the Shenzhen Composite Index remained in the downward trend.

 

Brent approaching $75.. and the decline undermining the Japanese Stock Exchange

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