Oil needs support.. and negative performance in most of the Asian stock exchanges

2021-08-17T18:17:48
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Oil needs support.. and negative performance in most of the Asian stock exchanges

Oil needs support.. and negative performance in most of the Asian stock exchanges: Oil performance varies from hour to hour,
falling and rising several cents, looking for any support that would make it rise again after a long wave of decline. 

Evest follows what is happening in the commodity trading market in the following report. 

Oil fluctuates in search of support

Oil benchmarks prices in today’s trading show weak and generally stable multi-directional dynamics that have declined during the previous three sessions.

The October futures price for Brent oil on the London Stock Exchange on the morning of August 17 was $69.49, 0.03% lower than the closing price of the previous session.

Following trading results on Monday, 16 August, these futures declined by 1.5% to $69.51 per barrel.

The price of West Texas Intermediate crude futures in September in electronic trading on the New York Mercantile Exchange (NYSE)
was $67.30 as of the morning of August 17. 0.01% higher than the final value of the previous session.

The day before these futures values fell by 1.7% to $ 67.29 per barrel.

This coincided with poor statistics from China, which showed a slowdown in the world’s second economy.

In his audit, the expert said that growth rates in industrial production and retail sales in the country slowed in July because
of a new wave of restrictive measures introduced in several regions of the country due to the spread of Covid-19.

In the US session, the barrel rose 2.7% to $69.79. Earlier, the White House appealed to OPEC+ to increase oil production
to avoid a market deficit when the global economy recovers.

Reuters

Reuters announced that OPEC+ believes that the market does not need more oil at present.

The price of Brent crude rebounded on Tuesday, but price quotations were limited by the dollar appreciation.

Investors focus on the speech of United States Central Bank President, Jerome Powell.

They need to hear from him about the possible timing of the reduced program to buy assets by the Federal Reserve. 

In the meantime, the impact of the delta-type coronavirus outbreak is adding to the oil market’s risk appetite.

Covid- 19 infections

An increase in oil in the Asian region should not be expected until the number of Covid- 19 infections begins to decline.

If the situation does not worsen under Corona, the price will maintain the sideways movement between the levels of $68-76. Otherwise,
buyers will not be able to avoid falling prices to $65-66 per barrel. 

After rising in early trading, with Brent crude falling to $69 per barrel (159 liters).

The prevailing market situation continues to be greatly affected by the deployed Coronavirus Delta variant changes,
forcing States to take measures to combat the epidemic once again.

Initially, oil prices were backed up by information that the Organization of the Petroleum Exporting Countries (OPEC) and other producers,
led by Russia, were not planning to increase production more than originally agreed, despite pressure from Washington.

According to four Reuters sources, the Alliance of Major Producers does not consider it necessary to increase production faster.

Later, however, information supporting oil prices once again overcame concerns about an increasing number of people infected with new Delta variants.

The deterioration of the situation has also led to much weaker than expected growth in retail sales and industrial production in China.

Oil prices settled on August 17, after falling during the previous three sessions, during which they fell by 3%.

The rapid spread of the new COVID- 19 strain, Delta, has raised a new wave of concerns about the potential demand for raw materials on the global market.

Statistics released by China on August 16 showed that the country’s economy had already felt the negative effects
of restrictive measures imposed to curb Delta. In the United States, gasoline consumption is declining for the third week in a row, according to Descartes Laboratories.

India

In India, however, demand for gasoline in the first half of August remained above pre-crisis levels in 2019, according to Bloomberg.

According to experts, periodic adjustments in the oil market are likely to be short-term, and the long-term trend remains upward.

We may see signs of economic recovery.

Demand will increase unless increased delta outbreaks lead to large-scale new closures. 

Goldman Sachs investment experts believe that the risk of Delta spreading to the oil market is temporary
and commit to predicting that the price of Brent crude will rise to $80 per barrel in the next quarter due to a lack of market supply.

Indicators variation in US indices and the Asian region is under the pressure of coron

In the United States on Monday, stock indices changed by 0.2-0.3%, the Dow Jones (+ 0.3%)
and Standard & Poor’s 500 (+ 0.3%) renewed their highs, while the Nasdaq declined by -0.2%.

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 Covid-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.

An additional negative factor for the market is talking about the possibility that the Fed will start to undone stimulus actions in the short term. 

More and more regulator representatives are in favor of starting to scale back the bond buyback program this fall.

On the other hand, there has been a decline in stock indices in Asia (Japan’s Nikkei index sinking by 0.4%,
China’s Shanghai Composite – 2.1%, Hong Kong’s Hang Seng 2%.

The Japanese market has been backed by strong corporate reports, but expectations that the country’s authorities will extend
the state of emergency in Tokyo and seven other provinces in the country continue to put pressure on buyers.

Oil needs support.. and negative performance in most of the Asian stock exchanges

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