Oscillating performance of oil in a week.. Finally, the Colonial Pipeline is normally back to work
Oscillating performance of oil in a week: This week, crude oil prices stabilized after collapsing last Thursday,
despite being able to rise in Friday’s dealings.
This week, West Texas Intermediate crude rose by 0.72% to record $65.37 a barrel,
while Brent crude rose by 0.63% to reach $68.71 a barrel.
However, India is the world’s third-largest consumer of crude oil, as the pandemic of Covid-19 which spread,
led to tightening social constraints once again so as to slow down the economy and reduce the movements of citizens.
This is considered a new risk of lowering the price of crude oil.
According to Reuters
The rise in commodity prices has been stalled and the crude oil market remains unclear in how it responds to high inflation in the United States besides the sudden rise in the Covid-19 infections in India.
US data affecting oil performance
Last Wednesday, the United States Department of Labour announced that the Consumer Price Index (CPI) for April rose or witnessed inflation of 4.2% compared to the previous year (on an annual basis).
This issue is much higher than expectations by 3.6%.
March
Meanwhile, in March, it grew by 0.8%, which is also much higher than expectations of 0.2%.
Basic inflation which excludes the energy and food sector,
grew by 3% on an annual basis and 0.9% on a monthly basis, which was the largest during the last 40 years.
The increase in annual inflation was the highest since 2008,
while on a monthly basis it was the biggest during the last 40 years.
High inflation may be an indication that the US economy is improving.
On the other hand, if high inflation occurs for a long time,
the purchasing power of American citizens may be exposed to a strong hit.
Reuters
According to Reuters, demand for crude oil will remain high during the second half of 2021,
and this will protect prices from declining.
Oil performance in a week
World oil prices began last trading week with a strong upward trend when US jobs data were not sufficient to reduce investors’ expectations. On the contrary, they boosted investors’ confidence in the economy.
The United States will deploy more stringent support and economic stimulus packages worth nearly $6 trillion.
The price of West Texas Intermediate Light Crude for July 2021 delivery, at the May 10th session,
recorded $65.39 a barrel, rising by $0.51 a barrel during the session.
The price of Brent oil for July 2021 delivery settled at $68.84 a barrel, up by $0.56 a barrel during the session.
Optimistic prospects for global economic recovery,
and the increased expectations for improved global demand for crude oil,
are also factors supporting oil prices.
In the United States, the head of the Federal Reserve Branch in New York has just expected that the US economy will witness the fastest growth for nearly 40 years and inflation will return to the target of 2% by 2022.
China
In China, statistical data show that the country’s exports increased by 32.3% in April 2021 compared to the same period in 2020.
The war against the Covid-19 epidemic brought about positive changes when vaccination programs were promoted.
Tourism activities have become active in countries and regions such as Russia, the United States, and Portugal,
and they also contribute to increasing confidence in the possibility of restoring energy demand and thus helping in rising oil prices.
Crude oil prices also received strong support from the news that US oil inventories decreased sharply during the week ending on May 7th.
Specifically, according to the US Petroleum Institute (API),
stocks of distilleries dropped this week to reach 872,000 barrels, after falling by 3453 barrels last week.
The American Petroleum Institute
Earlier, the American Petroleum Institute announced that the country’s crude oil inventories decreased by 77.7 million barrels during the week ending on April 30th, and gasoline inventories declined by 5.3 million barrels,
while distillation inventories fell by 3.5 million barrels during the same period.
In a report released on May 11th, the Organisation of Petroleum Exporting Countries (OPEC) maintained its forecast that global oil demand in 2021 will rise 5.95 million barrels a day, or by 6.6% to reach 96.46 million barrels a day compared to 2020.
This comment is unchanged from the expectations made by OPEC in its report of April 2021.
In this report, OPEC believes that lower demand in India will be offset by growth momentum in the United States and Chinese economies.
OPEC
In this report, OPEC also reduced its forecast for global oil demand by 300,000 barrels a day during the second quarter of 2021 due to the impact of the Covid-19 epidemic, but they increased by 150,000 barrels a day in the third quarter and by 290,000 barrels in the fourth quarter.
On May 11, the United States Energy Information Administration expected a decline in US oil production by 290,000 barrels a day in 2020.
This is much higher than previous forecasts, down by 11.02 million barrels a day.
At the end of the trading week, on May 15, oil prices recorded a sharp rise when the news was issued that the number of global Covid-19 infections continued to sharply decline last week,
demonstrating the effectiveness of the programs.
19 vaccines are under development.
Last week
Last week, the price of global oil received strong support from the weakness of the US dollar in the context of the rising inflation in the United States.
At the end of the trading week, West Texas Intermediate light crude for July 2021 delivery was stable at $65.5 a barrel, up by $1.66 a barrel during the session, while the price of Brent oil for July delivery settled at $65.5 a barrel.
However, on May 16, the price of oil also showed that the crude oil market was also exposed to significant downward pressure.
Covid-19
Although the Covid-19 epidemic is well-controlled and shows signs of decline,
it is developing in a complex manner, focusing on a number of countries and regions such as India,
Latin America, and Southeast Asia.
More seriously, the negative development of the Covid-19 epidemic in India is expected to be more complex when more and more patients in the country are suffering from black fungus disease.
The world’s largest oil importers showed signs of declining imports as oil prices rose and crude oil stocks were filled, while refineries and petrochemicals went into routine maintenance.
The Colonial Pipeline is back to work again
Colonial Pipeline, the operator of the American pipeline paralyzed by an electronic attack last weekend,
was announced that its operations had been returned to normal by delivering “millions” of liters of gasoline
to service stations in “a part of the country” The situation is still complicated.
In a Twitter message, the company announced that “all markets” of the operator are about 15 states
from Texas in the South to New Jersey in the northeast, are now being supplied.
Wednesday afternoon, the Colonial pipeline began to resume operations in the 8800-kilometer pipeline network,
the largest in the United States for refined products.
The Colonial Pipeline added “We recognize the fundamental nature of our network for millions of Americans”,
noting that it “safely saves approximately 100 million gallons of fuel a day and about 36 billion gallons a year”.
The cyberattack and pipeline closure caused a state of terror among car drivers,
causing queues at fuel stations and it also caused a shortage of fuel in many cities.