Crude oil deepened its decline below $74 a barrel on Friday. However, it was on track to end the week a little changed after an unexpected recovery from Monday’s slump, supported by expectations that the supply remains tight as demand recovers.
The price of crude oil and other risky assets plummeted at the beginning of the week due to concerns about the increase of the Delta variant of COVID-19 in the United States, United Kingdom, Japan and other parts of the world.
Brent crude dropped by 0.4% or 32 cents, to $71.91 a barrel, after climbing by 4.2% in the previous session. WTI crude slumped by 0.4% or 27 cents, to $70.03 a barrel, after adding 4.6% on Wednesday.
Analysts believe that oil bulls are back. However, concerns about the coronavirus have not disappeared completely.
Brent was heading to close the week with a marginal increase of 0.2% after accumulating losses in the previous three weeks. The WTI was about to end the stable week.
Both contracts fell about 7% on Monday but have already picked up that decline. Investors hoped that demand would remain strong and the market would be supported by declining oil stocks and rising oil rates.
Natural gas prices are soaring worldwide since hot weather conditions create demand for electricity to run air conditioners.
The commodity futures surged to $4 per million British thermal units in the United States for the first time since December 2018.
Gas for August delivery closed at $4.003, which is the highest closing price in 31 months.
The market is worried about tight supply at the end of the following winter. It’s the period of the year when gas consumption peaks. Stockpiles are already below normal, and production growth has been restrained. Exports also contribute to the tightening of the inventories. In May, for the first time, the US exports exceeded Australia’s.
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