Markets May Hinge on Containment of Delta Variant
August 2, 2021
Crude and refined fuel product prices rose slightly on Friday for nearby futures trading month. Prices rose Friday with analysts reiterating that higher vaccinations rates would limit the need for harsh lockdowns, especially in the US. Now there is a lot of debate on this matter and the weekend was not positive for COVID as the US reported the number of cases ramped up substantially. The recent news on the delta variant has not seen a lot of positive headlines so the market will have to see how things progress.
Prices were also supported last week on Friday as the Baker Hughes Rig Count reported oil rigs down 2 putting total oil rigs at 385 and last year there were 180 rigs.
Reports that large fully integrated oil companies are not ramping up spending on new oil wells and focusing on debt reduction, which should keep supplies tight.
EIA report on Friday that total US crude oil production rose by only 80,000 bpd from April to May up to a total of 11.231 million bpd. EIA revised April 2021 production down by 28,000 bpd.
According to a Reuters survey, OPEC oil output increased in July to its highest level since April 2020, as the group further eased production cuts under a pact with its allies and Saudi Arabia phased out a voluntary supply cut. OPEC produced 26.72 million bpd, up 610,000 bpd from June’s revised estimate.