The price of crude oil weakened last week, pressured by expectations of growing supplies and fears because of a rise in new coronavirus cases. The global recovery could be hit by the fast-spreading Delta variant of the coronavirus, which could trigger new lockdowns that would likely reduce oil demand.
Fundamental analysis: Baker Hughes that the U.S. oil rig count increased to their highest number since April 2020
Energy services firm Baker Hughes reported last week that the U.S. oil rig count increased to 380 active units last week, their highest number since April 2020. U.S. crude production has increased by 300,000 barrels per day (bpd) over the last two weeks, while Saudi Arabia and the United Arab Emirates reached a compromise paving the way for OPEC+ producers to finalize a deal to increase production.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
“The longer it takes for OPEC+ to announce an extraordinary meeting to vote on the extra barrels, the more it implies other OPEC+ members may also want increases to their baseline quota,” said Bob Yawger, director of energy futures at Mizuho in New York.
The Organization of the Petroleum Exporting Countries announced last week that the oil demand should increase in 2022 to levels seen before the pandemic; still, the global recovery could be hit by the fast-spreading Delta variant of the coronavirus. Delta is now the dominant variant and accounts for more than 50% of positive COVID-19 samples in many countries, which signals that the battle against the coronavirus is still not over.
The situation in Britain is serious, and the country reported on Friday its highest number of new COVID-19 cases in more than six months while the U.S. will impose a rule to wear masks again. Japan has a new high just before the start of the Olympics; new curfews are being imposed in Spain, while Indonesia is suffering through record deaths.
Technical analysis: Crude oil price has weakened on a weekly basis
Those whose interest is to invest in commodities like oil should consider that the risk of further decline is probably not over.
If the price falls below $70 support, it would be a firm “sell” signal, and the next target could be around $65. The first resistance level stands around $75, and if the price jumps above this level again, it would be a signal to trade crude oil, and we have the open way to $80.
The price of crude oil weakened last week, pressured by expectations of growing supplies and fears because of a rise in new coronavirus cases. Baker Hughes that the U.S. oil rig count increased to their highest number since April 2020 while Delta variant of the coronavirus could trigger new lockdowns. The risk of further decline is probably not over, and if the price falls below $70 support, the next target could be around $65.
Where to buy right now
To invest simply and easily, users need a low-fee broker with a track record of reliability. The following brokers are highly rated, recognised worldwide, and safe to use: