Oil started the week with a decline of 2%.. And positive trading dynamics in Asia

2021-08-09T13:10:18
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Oil started the week with a decline of 2%.. And positive trading dynamics in Asia

Oil started the week with a decline of 2%.. And positive trading dynamics in Asia:
Oil has not been able to start trading this week at a rising edge,
as it continued to decline amid the new wave of the delta variant of the Coronavirus Covid-19 that many countries are witnessing,
which led to a major crisis in oil now that may be the largest since the beginning of the virus’s emergence at the end of 2019. 

Evest follows developments in the commodity trading market in the following lines:

Oil continues to fall as the US dollar rises

Crude oil prices continued to drop more than 2% in trading earlier this week.

The correction was supported by the strengthening of the US dollar
and concerns that new pandemic constraints in Asia, particularly China,
could hamper the global recovery in fuel demand.

In the trading of the beginning of the week today, Monday, the price of Brent crude futures contracts for October 2021 delivery decreased by 2.2% to 69.17 US dollars per barrel.

Brent crude has already fallen 6% last week, posting its biggest weekly loss in four months.

Similarly, the price of West Texas Intermediate crude futures for September 2021 fell 2.4% to the US $66.64 per barrel,
after falling by about 7% last week in its biggest weekly fall in nine months.

The incidence rate acceleration in the delta model

“Concerns about the potential erosion of world oil demand have resurfaced with the acceleration of the infection rate
with the Delta model,” RBC analyst Gordon Ramsay said in a note.

ANZ analysts also pointed to new restrictions in China, the world’s second-largest oil consumer,
as a major factor impeding demand growth prospects.

The restrictions include flight cancellations, travel restrictions in 46 cities,
and restrictions on public transport and taxi services in the 144 most affected areas.

Today, China reported 125 new cases of Covid-19, up from 96 the previous day.

In Malaysia and Thailand, the virus infections also continued to record a daily record of more than 20000 cases.

In addition, data released over the weekend showed China’s export growth slowed more than expected in July following the Covid- 19 outbreak and flooding.

At the same time, import growth was weaker than expected.

“Both decades seem vulnerable to more bad news about the coronavirus, focusing on mainland China.

Markets will be sensitive to headlines that show that Chinese economic recovery also peaked after weekend trade data.” Jeffrey Senior Market Analyst at OANDA said. 

China’s crude oil imports declined slightly on a daily basis in July to 9.71 million barrels per day.

This means that for the fourth month in a row, China’s crude oil imports fell below 10 million barrels per day and fell sharply to a record 12.94 million barrels per day in June 2020 as refineries rose against the backdrop of cheap crude.

The United States dollar’s rise to a four-month high against the euro also affected oil prices.

Especially after the US jobs report released at the end of last week was stronger than expected.

This raised speculation that the Federal Reserve might move faster to tighten US monetary policy.

The strong US dollar makes oil more expensive for those with other currencies.

Rising tensions in the Middle East

Financial market observer Hans Koy estimates that global oil prices will remain volatile throughout this week in the wake of rising tensions in the Middle East.

Earlier, Israeli fighter jets attacked a rocket launch site in Lebanon after two rockets were fired into Israeli territory from Lebanon.

“There was an attack on an oil tanker off the coast of Amman, and Israel accused Iran of doing so,” Hans said.

Hans explained that two British and Romanian crew members were killed in the attack, which Iran denied.

“Israel is ready to attack Iran. Tensions are rising as nuclear talks between Iran and Western powers
to ease sanctions on Iranian oil exports appear to be stalled.”
Israeli Defense Minister Benny Gantz told YNet News.

With tensions rising between Iran and world powers over the airstrike,
it appears that the nuclear agreement talks will be lengthy
and that sanctions on Iran are unlikely to be eased immediately.

Mixed dynamics in the United States

In the United States, stock indexes on Friday showed mixed dynamics in the 0.2-0.4% range,
and the Dow Jones (+ 0.4%) and Standard & Poor’s 500 (+ 0.2%) set new record highs.

On Friday, there were positive labor market statistics in the United States for July, bringing the Fed’s decision to tighten monetary policy,
which is negative for stock markets and positive for the dollar. 

The number of new jobs in the United States in July was 943 thousand with a growth forecast
of 845-870 thousand after an increase of 850,000 in June,
and unemployment fell to 5.4% with an expected fall to 5.7% from 5.9% in June.

On the other hand, more than 100000 new cases of coronavirus were detected in the United States over the weekend,
the highest in six months.

The current pandemic status did not augur well for the lifting of restrictions in many countries,
which always makes markets unstable and reduced morale and risk-taking. 

Chinese indices rise.. and the Japanese Stock Exchange is closed

In Asia, stock indices grow on Monday (Japanese exchanges closed on Mountain Day), with China’s Shanghai Composite Index up 1%, and Hong Kong’s Hang Seng Index up 0.4%.

In China, 125 new infections were identified last Friday, the highest since mid-January,
with reports of new restrictions imposed by the country’s authorities,
including cancellations of flights, restrictions on public transport,
and restrictions on taxi services in some of the most affected areas.

 

Oil started the week with a decline of 2%.. And positive trading dynamics in Asia

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