European Central Bank President “Guardedly Optimistic” on Economic Recovery
July 12, 2021
The Baker Hughes Rig Count said that the US added 2 crude oil rigs for the week up to a total of 378 rigs. Last year the US had only 197 crude oil rigs online. US oil rigs have risen by a total of 206 rigs since August 21, 2020. From John Kemp, US shale firms are adding drilling rigs much more slowly in this cycle than during the two previous cycles. The oil-directed rig count has risen by an average of 3 per week over the last 13 weeks compared with an average of 11 per week at this point in the recovery that started in 2016 and 5 per week in the recovery that started in 2009. The lack of a drilling response to higher prices is the most important reason prices have climbed above the long-term average so early in the current cycle.
European Central Bank President Christine Lagarde said the bank will including a revision to their forward guidance at the Jul 22nd meeting. She also said she expects the current asset purchases program to run until “at least” March 2022. She also said she was “guardedly optimistic” about the recovery prospects for the euro area with the Delta variant of the coronavirus posing a threat to a return to normal life. These comments are a bit of a negative for the market. These concerns are not news but getting headlines is a reminder for the market.
China’s recovery is also showing signs of slowing which is a reminder that the global economy could slow down, and the Delta variant is one issue that could help that slowdown.
The energy market continues to trade in a range with no breakout or breakdown. The market continues to move on OPEC+ uncertainty and delta variant impact on the recovery, as well as, other factors.