Oil fell in Asia on Thursday morning. The United States Energy Information Administration (EIA) confirmed a surprise increase in crude oil supplies in the United States while rising COVID-19 cases globally dampened the outlook for fuel demand. However, due to expectations that stores will remain tight until the end of 2021, the black liquid retained most of its gains from the previous session.
Brent oil futures rose 0.50 per cent to $71.87, following a 4.2 per cent gain the previous session. After rising 4.6 per cent on Wednesday, WTI futures were up 0.47 per cent to $69.97.
The EIA’s crude oil supply data for the week ending July 16 showed a build of 2.108 million barrels in the United States. According to Investing.com, a draw of 4.466 million barrels has expected. In comparison, a 7.897-million-barrel form has recorded the previous week.
Crude oil supply
The American Petroleum Institute’s crude oil supply data from the previous day showed a build of 806,000 barrels.
Energy volatility remains elevated as traders deal with short-term demand weakness caused by COVID-19 Delta variant concerns. According to OANDA senior analyst Edward Moya, crude deficits was expecting to last until the end of the year.
However, the EIA data showed a 121,00-barrel draw in gasoline inventories, indicating that demand is still high during the summer driving season.
Meanwhile, OPEC+ agreed earlier this week to increase supply by 400,000 barrels per day from August to December 2021. However, even after the dispute was resolving, a cartel is unlikely to enter the market soon. As a result, the most critical risk to market fundamentals remains a deterioration in fuel demand.
Gold was down in Asia on Thursday morning, remaining close to a one-week low. As fears of an increase in COVID-19 cases subsided, the dollar strengthened, and risk appetite increased. Both facts reduced the yellow metal’s appeal to investors.
Gold futures fell 0.20 per cent to $1,799.80 after falling to their lowest level since July 12 during the previous session. The dollar, which typically moves in the opposite direction of gold, edged up on Thursday to just below three-and-a-half-month highs.
Global equities up as investors appeared to have moved past concerns about increased COVID-19 cases involving the Delta variant and inflationary pressures.
European central bank policy decision
Investors are now looking forward to the European Central Bank’s (ECB) policy decision later in the day. The central bank widely expects to maintain its dovish stance and implement changes to its strategy for the first time.
The dollar has risen to its highest level in three months, putting pressure on gold prices, and Wall Street has recovered for the second day. In other precious metals, silver fell 0.1 per cent, palladium rose 0.4 per cent, and platinum remained unchanged at $1,080.39.
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