Oil price recovers slightly - very modest rate of rise

 

crude oil price wednesday

The crude oil price that saw a precipitous fall on Monday recovered lost ground somewhat on Tuesday, perhaps owing to the modest inventory draw predicted by the API, American Petroleum Institute, for the week ending August 6.

The API said there was a draw of 0.86 million barrels during the period it referred to.

As of 10:00 GMT, both the rate of rise and the rise itself were fairly diffident; both WTI and Brent recorded less than 1% gain relative to what it was on Tuesday.

Both analysts and investors are awaiting the next inventory forecast by the EIA, US Energy Information Administration, on Wednesday; last week the forecasts by the API and the EIA were different, though.

The EIA, in its weekly figures, declared that there was a US crude inventory build-up for the period ending August 3 – 3.6 million barrels. The unexpected development left the crude oil markets tumbling, owing to the cumulative impact of the other uncertainties as well.

The exponential rise in the spread of the new Delta variant of the Coronavirus across the globe is the main cause of decline in demand for the crude oil; the situation is getting worse in Asia, where the key importers are grappling with the surges of the pandemic, despite the relative success in vaccinating the populace.

The tension in the Gulf of Oman – and the region – has not left the field of view of the investors either; the danger to oil tankers is still high.

Against this backdrop, the talks on reviving the JCPOA, 2015 Iranian nuclear deal, continue to be in a state of limbo. That means there is no prospect of Iranian oil returning to the markets in great volumes as things stand, unless the new Iranian administration makes a significant move to break the impasse.

 

 

 

 

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