Market Scenario Oil Prices Continue to Drop
Oil prices are continuing to drop in the background of the delta variant of the coronavirus, which is spreading quickly and causing market uncertainty, as well as the potential increase in the supply of oil production by Opec member countries.
Singapore – Oil prices fell further in early trading on Friday, extending their markdowns from the previous day. In the morning, a barrel (159 liters) of North Sea Brent cost 73.23 dollars. That was 24 cents less than the previous day. The price for a barrel of the American sort West Texas Intermediate (WTI) fell by 18 cent to 71.49 dollars.
The oil prices were loaded in the past days above all by two developments: On the one hand, the rapidly spreading delta variant of the coronavirus is causing uncertainty in the markets. The more contagious variant is causing increasing problems, particularly in Asian countries. It is uncertain how the spread will affect economic development and thus demand for oil.
A second negative factor is the production policy of the crude oil alliance Opec. After the 23 countries were initially unable to agree on a common strategy for the second half of the year, a solution now appears to be on the horizon. However, this could result in higher oil production than initially intended. The higher supply would be met by demand that is fragile due to corona.