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Oil prices drop below USD70 U.S. prices after biggest one day loss

Crude-oil futures dropped stridently on Monday July 19, 2021 to finish under USD70 per barrel, with U.S. prices reporting their major every day percentage thrashing since September.Tensions over the spread of the COVID delta variant pursue to blur the demand view post OPEC+ reached an agreement to increase oil production.

Market analyst at DTN, Troy Vincent said that the increase in the delta variant cases has not only hampered OPEC’s capability to boost production without declining prices but it also has much broader insinuations for the worldwide trade that is unsupportive of oil prices.He anticipates an intensifying U.S. dollar, deteriorating Chinese and global economic growth, increasing production from the OPEC+, which is a association of the Petroleum Exporting Countries and their allies and the flexible non-OPEC production to put a cover on crude prices in the remaining half of the year.

Oil prices drop below USD70 U.S. prices after biggest one day lossVincent also said that Global refinery operates merely cannot go back to pre-COVID levels until emerging nations observe vaccination rates increase evidently and international travel gets back to regular levels, and with the fall-winter recurring virus time arriving for the Northern Hemisphere the goal doesn’t seem to be approachable anytime close.

He believes that though the market might witness a short-term spur in rates post the sharp selloff.West Texas Intermediate crude prices for August delivery CL00, 1.12% CLQ21, +0.15%  fell by 7.5%, or USD5.39 to get at USD66.42 per barrel on the New York Mercantile Exchange. The contract for August terminates in a settlement on Tuesday July 20, 2021.The U.S. reference ended down 3.7% last week which is the biggest weekly drop for a front-month agreement ever since the week ended March 26.

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