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Oil prices in the US under pressure, because China can reduce purchases of raw material
Author:Mariusz Dasiewicz
Oil on the New York fuel exchange cheaper during the Wednesday session in response to fears that China, a key global oil importer, may reduce its purchases during the next wave of Covid-19 in that country, inform the brokers.
West Texas Intermediate oil supply for September at the NYMEX fuel exchange in New York City costs US$70.34, below 0.31%.
Oil Brent in deliveries for October at the ICE Futures Europe in London is valued at $72.35 per barrel, below 0.08%.
W China is spreading a variant of the Delta coronavirus, and the remedial action taken by the Chinese authorities and restrictions on the fight against this pathogen may harm the demand for fuel and affect the reduction of its imports.
Wuhan city authorities, in central China, ordered on Tuesday a mass screening of all 11 million residents on Covid-19 due to the detection of the first new local symptomatic cases of coronavirus infection in over a year.
Urban medical services reported infection on Monday in seven inflow workers.
These are the first new local cases reported in Wuhana since the spring of 2020 after an unprecedented, over two-month lockdown town managed to stop the first wave of pandemics.
The Delta coronavirus variant was detected in China in almost half of the 32 provinces in just 2 weeks.
At least 46 cities recommended that their residents refrain from travelling unless absolutely necessary.
Restrictions on mobility in this leading global economy pose a risk to fuel demand, among others.
"The spread of the Delta variant poses a risk to oil prices, and investors' eyes are directed towards the situation in China, which is the epicentre of global fuel demand," says Kim Kwangrae, Senior Raw Markets Analyst at Samsung Futures Inc.
"Oil notes will remain under pressure at least until there is more information about coronavirus proliferation," he adds.
As the risks associated with the spread of Delta have escalated, analysts are already reviewing their global growth forecasts.
Meanwhile, support for oil prices can in the short term be given to US stocks of this raw material and its products.
The U.S. Paliw Institute (API) is expected to state in its latest report that oil stocks in the U.S. fell by 879,000 barrels last week, and gasoline stocks decreased by 5.75 million barrels at that time.
Official calculations of US fuel stocks will be given on Wednesday after 16.30th Department of Energy (DoE).
WTI oil on Nymex in N.Jork lost 4.6 percent of the first 2 sessions this week.
Source: PAP
