Oil Prices fell on Thursday, pulling U.S. prices down to their lowest finish in nearly a month, a day after data showed a rise in U.S. fuel supplies. Also adding to problems about supplies following reports that the United Arab Emirates and Saudi Arabia reached a compromise that would allow a further relaxation of output curbs beginning next month.
The Worries that the spread of the delta coronavirus variant has also contributed to weakness in Oil Prices as the variant is leading to renewed lockdowns in some countries, particularly in Asia, dulling energy demand. Tariq Zahir, managing member at Tyche Capital Advisors said that we do feel the Delta variant is the biggest factor as Asia is having a real issue and Europe is problematic.West Texas Intermediate crude for August delivery CL00 CLQ21 fell $1.48, or 2%, to settle at $71.65 a barrel on the New York Mercantile Exchange, the lowest front-month contract finish since June 18.September Brent crude BRN00 BRNU21, the global benchmark, lost $1.29 or 1.7%, at $73.47 a barrel on ICE Futures Europe, the lowest settlement since July 7.
Crude fell sharply Wednesday after reports said the U.A.E. and Saudi Arabia had reached a compromise in their dispute over output cuts. The U.A.E., however, has said no deal has been reached with OPEC+ producers and that talks are ongoing and would need the support of other OPEC members, according to various news reports.
A meeting of OPEC and its allies were known as OPEC+ ended earlier this month without an agreement on a proposed easing of output curbs after the U.A.E. insisted it should be allowed to raise the baseline dictating its output, putting it at odds with Saudi Arabia.Carsten Fritsch, commodity analyst at Commerzbank said that it is unclear whether the UAE’s higher oil production would be set off against the planned increase in OPEC+ production. That would mean the other countries could raise their output by less, which they would hardly be willing to accept.