Crude Oil Slipped on Coronavirus Concerns
A barrel of crude oil is being traded with losses in the international markets of New York and London.
WTI crude fell by 0.6% or 42 cents and traded at $70.14 a barrel in contracts with delivery for September.
On the other hand, Brent crude slipped by 0.4%, or 26 cents to $72.15 a barrel.
ING bank analysts stated that coronavirus worries have weighed on oil prices recently.
Inventory data released by a private sector entity has provided some price support overnight. However, the main concern at the moment is demand rather than supply.
On Tuesday, the API reported a drop in crude reserves of 879,000 barrels for the week ending July 30, bringing the total crude reduction to nearly 55 million barrels.
The US and China, the world’s two largest oil consumers, are facing rapidly spreading outbreaks of the highly contagious delta variant. Analysts fear that it will limit fuel demand.
In China, the spread of the coronavirus from the coast to central cities has prompted authorities to impose strict measures to curb the outbreak.
Wuhan’s 12 million residents will be tested for Covid-19. The important thing is that China is now experiencing the most widespread outbreak since the virus appeared, even in areas that have been virus free for months.
Bullish weather forecasts sent natural gas to a 31-month high
Natural gas prices are trading close to a 31-month high. Strong demand for US exports supports the gas prices.
The production totals 91.5 billion cubic feet, while the demand is higher due to the need for cooling amid increasing temperatures.
Gas prices in Europe increased to around $14 per MMBtu. Meanwhile, in Asia, the spot price for LNG surpassed $15 per MMBtu, the highest price since 2005.
For the first time in a decade, buyers in Europe have struggled to supply tanks during the summer at their lowest price. Russia is curbing exports to the continent. Moreover, Brazilian imports rose to record levels.
