In trading on Tuesday (24th), crude oil futures prices recovered for the second consecutive day, because there are signs that the infection rate of the Delta variant new crown virus in China has decreased.
In addition, a fire on an oil platform in Mexico has reduced the country’s daily crude oil production by about a quarter, which has boosted crude oil prices.
Phil Flynn, a senior market analyst at Price Futures Group, said that the soaring oil prices were due to “China’s announcement of a single Japanese soil 0 diagnosis and a fatal fire on the Pemex oil platform in the Gulf of Mexico, which reduced daily oil production by approximately 421,000 barrels.”
- The price of WTI crude oil futures for October delivery rose 1.90 US dollars, or 2.9%, to close at 67.54 US dollars per barrel.
The WTI crude oil futures price surged by more than 5% on Monday, ending its 7-day losing streak.
- The price of Brent crude oil futures for October delivery rose 2.3 US dollars, or nearly 3.4%, to close at 71.05 US dollars per barrel.
According to Dow Jones market data, both WTI and Brent crude oil futures prices in recent months have reached highs of more than one week.
China’s epidemic slows down
China announced on Monday that after the latest wave of outbreaks broke out in mid-July and the infection spread rapidly for more than a month, it has finally slowed down. The past day was the first local zero diagnosis since mid-July.
Warren Patterson, head of commodity strategy at ING, said in a report, “This shows that the most severe days of China’s latest wave of epidemics may have passed, and concerns about oil demand may now begin to ease.”
Flynn said, “If China has really contained the Delta virus, then the oil market will obviously overreact the extent of the destruction of oil demand in terms of prices.”
Gulf of Mexico Fire
According to Reuters, a fire broke out on a Pemex-operated oil platform in the Gulf of Mexico on Sunday, resulting in 5 deaths and 6 injuries, as well as the closure of 125 oil wells. That is, 421,000 barrels of crude oil production was suspended per day, equivalent to a quarter of Mexico’s production. about.
The report stated that Pemex plans to reconnect the facility and the oil well before Wednesday.
Patterson wrote, “The prolonged period of production suspension may support heavier grades of crude oil, as reduced production will cause the market to tighten these grades of crude oil.”
Other energy commodity trading
- The price of gasoline futures for September delivery rose 2.7% to close at nearly $2.18 per gallon.
- The price of thermal oil futures for September delivery rose 3.1% to close at $2.07 per gallon.
- The price of natural gas futures for September delivery fell 1.2%, closing at nearly US$3.90 per million Btu
The U.S. Energy Information Administration (EIA) will release last week’s U.S. oil supply report on Wednesday.
According to a survey by S&P Global Platts, analysts on average predict that last week (as of 8/20), US crude oil supplies will be reduced by 3.2 million barrels, gasoline inventories will be reduced by 1.5 million barrels, and distilled oil inventories will be reduced by 400,000 barrels.
API announced later on Tuesday that last week (as of 8/20), US crude oil inventories decreased by about 1.6 million barrels, gasoline inventories fell by about 985,000 barrels, and distilled oil inventories increased by about 245,000 barrels.
