- Crude oil futures were stable to slightly higher.
- A resurgence in COVID-19 cases globally fueled by the delta variant has impacted the oil demand outlook in August, particularly in China, the world’s largest energy consumer.
Crude oil futures were stable to slightly higher in mid-morning trade in Asia Aug. 17 amid bargain-hunting by investors, with the upside limited by the rising number of COVID-19 cases globally sapping market sentiment, reports S&P Global Platts.
ICE Brent Futures Contract
At 11:20 am Singapore time (0320 GMT), the October ICE Brent futures contract was up 4 cents/b (0.06%) from the previous close at $69.55/b, while the NYMEX September light sweet crude contract was 8 cents/b (0.12%) higher at $67.37/b.
Chinese Crude Refineries Data
“China also reported weaker-than-expected industrials and retail sales on Monday, stoking fears about the global recovery, and oil demand,” said Avtar Sandu, senior commodities manager at Phillips Futures, on Aug. 17.
Other analysts shared similar bearish views, noting that mobility in China has fallen sharply as authorities impose strict guidelines to curb rising COVID-19 infection rates.
China’s refineries processed 13.96 million b/d of crude in July, down 6% from a record high of 14.86 million b/d in June, National Bureau of Statistics data released Aug 16 showed. The volume was also down 0.9% year on year, marking the first year-on-year fall since March 2020.
With the movement restrictions currently in place, S&P Global Platts Analytics expects China’s average crude throughput to retreat to around 14.6 million b/d in the third quarter from around 14.7 million b/d in Q2.
CDC’s COVID Report
In the US, the Centers for Disease Control and Prevention on Aug. 12 reported the highest number of COVID-19 cases in the US since January at 146,949. The seven-day moving average stood at 108,470 as of Aug. 15, more than seven times the average at the start of July.
Oil Prices Stability
However, despite the global resurgence of COVID-19, Wall Street investment banks are forecasting that oil prices will be supported as the outlook for global growth remains strong.
Morgan Stanley expects Brent oil prices to be in the mid- to high $70s range for the rest of 2021 and remain supported well above $70/b throughout 2022.
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Source : S&P Global Platts
