Oil is declining for the second session in a row.. And tourism stocks losses due to Delta variant
Oil is declining for the second session in a row.. And tourism stocks losses due to Delta variant:
Today brings unpleasant surprises of trading instruments in the commodity market, or stock trading market,
where the delta variant of Covid-19 virus and its high prevalence seems to have affected trading traffic,
and forced oil to trade in the negative zone for the second day in a row.
Evest follows all this and more in the following report.
Oil continues to decline for the second session in a row
The price of West Texas Intermediate crude fell Tuesday morning for the second session in a row amid growing concerns about the prevalence of the pandemic after the Delta strain.
As a result, new disease outbreaks have emerged in many places and restrictions have been re-imposed.
The price of West Texas Intermediate crude listed on the U.S. NYMEX Stock Exchange fell 0.14% to $72.81 on Tuesday morning.
Although the day before it was at its highest level since October 2018 above $74.40.
West Texas Intermediate crude oil prices are targeting a closure of the second quarter of 2021 at an increase of nearly 23%.
This is the fifth three-month growth period in a row.
Brent crude
Meanwhile, Brent crude fell on Tuesday by 0.86% to $73.94 per barrel, after Monday brought in sales of more than 2%.
After setting new records in more than two and a half years during the Asian session, crude prices fell again on Monday, June 28,
weighed by the prevalence of delta variant as the highly anticipated OPEC+ peak looms.
The price of the North Sea oil barrel for August delivery ended at $74.68 in London, down 1.97% or $1.80 from Friday’s closure.
In New York, West Texas Intermediate crude for the same month lost 1.54% or $1.14 to $72.81.
Brent and West Texas Intermediate approached $76.60 and $74.45 earlier today, the first since October 2018, before declining again.
All investors are focused on next week’s OPEC + meeting, where group members will discuss a plan to ease ongoing production constraints to varying degrees from May 2020.
Analysts are divided over the scope of OPEC’s release of supplies.
Basically, there are two expectations: Production increased since August by a total of 250 thousand barrels per day or 500 thousand barrels per day.
According to OCBC experts, OPEC could increase production by 250 thousand barrels per day since the beginning of August.
If not, then we can see that Brent crude hit $80 a barrel next month.
As for ING experts, they expect that OPEC will increase supply by at least 500 thousand barrels per day.
Delta strain
Owing to the prevalence of the Delta strain, Spain and Portugal, two of the most popular European tourist nations, have imposed new restrictions.
Some are targeting unvaccinated Britons.
UK citizens are also finding it more difficult to travel to the US,
and talks on a plan to allow travel between these countries are currently on hold, Reuters reported.
This evening, we’ll get an estimate of the change in the level of crude oil reserves from the American Petroleum Institute,
which will give some hint of the current demand for the crude.
The previous five consecutive readings showed a contraction in inventories,
each time surprising analysts who underestimated the extent of the fall.
According to some experts, the prospects for a recovery in oil demand this summer may be significantly exaggerated,
especially as the delta variant has affected Europe, and the prevalence of the virus in South-East Asia and Australia has caused further closures.
On the other hand, it seems unlikely that the United States will lift sanctions against Iran in the near future.
France called on Tehran yesterday, Monday, to restore “immediate” and “full” access to its IAEA positions,
while an interim settlement between the parties ended on June 24.
This question is part of the broader framework of the ongoing talks to try to salvage the 2015 International Iranian Nuclear Agreement concluded in Vienna
but breached in 2018 by the withdrawal of the United States.
For oil investors, the question is whether the sanctions that currently prevent Iran from exporting its production will be eased,
which would significantly alter the black gold market’s balance and could affect prices.
Dax index in the negative zone
The fear of a delta variant prevalence and renewed restrictions as well as the reluctance to read the U.S. Labor Market Report on Friday slowed down the Dax index yesterday.
The German leading index started the day amicably The DAX index is currently trading at 15643 points, about 0.6% higher than the previous day’s closing price.
Currently, there’s very little movement in the DAX index.
Technically, the German benchmark index is going through a side phase.
On the one hand, the upward line of resistance at 15680 points, on the other hand, the two all-time peaks at 15.733 / 15806 points are blocking the road upward.
On the downward side, the DAX is strongly supported.
In addition to the upper trend channel line at 15473 points currently, the 55-day ascending EMA line at 15375 points,
and the upper edge of the previous trading range at 15369 points to the southern hedge.
Tourism stocks are the loser because of the delta variant
Especially since the already suffering tourism industry’s stocks were among the losers yesterday.
This has led to concerns about possible rolling travel restrictions.
Summer months are particularly important for tour operators, hotels, and airlines.
But the United States labor market report scheduled for Friday also causes restraint despite today’s prices hike.
The focus is likely to be on wage costs. If these continue to rise, inflation fears may arise again.
Oil is declining for the second session