Oil prices rose on Monday morning (August 23), recovering from several bearish sessions, although concerns about increased cases of the Delta variant kept sentiment cautious.
Brent crude rose $1.16, or 1.8 percent, to $66.34 a barrel, after hitting its lowest since May 21 of $64.60 earlier in the session.
US crude oil (WTI) for October delivery rose $1.07, or 1.7%, to $63.21 a barrel, recovering from $61.74, the lowest since May 21.
Both oils fell sharply last week. Brent fell about 8% and WTI fell about 9% – as markets braced for weaker fuel demand around the world due to rising infections.
Many countries around the world are responding to the rising rates of coronavirus infections, caused by the highly transmissible Delta variant, by extending the duration of restrictive measures.
China, the world’s largest crude oil importer, has imposed new restrictions that are affecting shipping and global supply chains. The US and China have also imposed restrictions on flights.
Some US companies have delayed their plans to return to the office. Apple Inc AAPL.O, the largest US company by market value, is delaying bringing back its employees until early 2022, Bloomberg reported.
The US dollar hit a nine-month high on signs from the US Federal Reserve that it is considering reducing stimulus this year. The dollar strengthens, making oil more expensive for holders of other currencies.
Services firm Baker Hughes said U.S. oil production rose to 11.4 million bpd in the most recent week, and drillers added rigs for a third straight week.
Along with that, the Organization of the Petroleum Exporting Countries (OPEC) and major non-OPEC producers (the OPEC + group) are gradually increasing the supply of capital that was cut in the early stages of the pandemic.
Francisco Blanch, commodities & derivatives strategist at Bank of America, said: “The oil market has quickly recognized that the Delta variant is a growing problem and a potential impediment to growth. fuel demand recovery.
Source: VITIC/Reuters
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