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Oil futures were under pressure Tuesday, with both benchmarks on track for a fourth straight day of declines, as investors fretted over the outlook for demand due to the ongoing spread of the delta variant of the coronavirus that causes COVID-19.
West Texas Intermediate crude for September delivery
CL00,
CLU21,
fell 46 cents, or 0.7%, to $66.83 a barrel on the New York Mercantile Exchange. October Brent crude
BRN00,
BRNV21,
the global benchmark, was down 36 cents, or 0.5%, at $69.15 a barrel on ICE Futures Europe.
“The fundamental outlook for oil is mixed as in the immediate term, delta fears are weighing on demand expectations. Medium term, a global supply deficit is expected
to last through year-end,” wrote Tom Essaye, president of the Sevens Report, in a note.
“Looking further down the road, sharp increases in OPEC+ production in 2022 are expected to swing the market back into a surplus. As such, more sideways trade between support at $66 and resistance at $75 in WTI is expected,” he said. “ Risks for a downside break do seem to be building with more uncertainty about the economic recovery emerging.”
New Zealand took drastic action Tuesday, with the government putting the entire nation into a strict lockdown for at least three days after finding a single case of coronavirus infection in the community. The continued spread of the virus is being blamed for renewed congestion at ports in China, adding to worries about further lockdowns and the potential for a slowdown in economic activity around the world.
The Biden administration was expected to announce that most vaccinated Americans should get a COVID-19 booster shot eight months after being fully vaccinated, the New York Times reported Monday night.
Crude fell Monday but ended the day off session lows, finding support late in the session after Reuters reported that the Organization of the Petroleum Exporting Countries and its allies don’t believe the market needs more crude than they already plan to produce in coming months.
The Biden administration last week urged OPEC+ to produce more crude.
