Oil Edges Higher as Investors Assess Uncertain Demand Outlook

Sharon Cho
·2 min read

(Bloomberg) -- Oil edged higher after falling for the first time in three days as the market assessed the outlook for energy demand following the latest Covid-19 comeback across the world.

Futures in New York added 0.2% after sliding 0.6% on Monday to settle near $74 a barrel. The delta variant is spreading rapidly through regions from Asia to the U.S., leading to a spike in infections and renewed lockdowns. The flare-up adds to market uncertainty after OPEC+ ended supply talks last week without an agreement for August.

“We have seen this playbook before -- it was the European resurgence at the start of the year, then India followed by Southeast Asia,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. “In the short term, we might see a bit of jitter across markets, but the fundamental picture has hardly budged.”

Oil has rallied more than 50% this year as the vaccine rollout in key economies such as the U.S. accelerated the rebound from the pandemic, although the spread of delta is a reminder the recovery will be bumpy. The International Energy Agency will give an updated snapshot of the market later on Tuesday.

The window for OPEC+ to boost output in August is closing quickly. Saudi Arabia and the United Arab Emirates -- whose dispute derailed a deal -- have started to lock in volumes to customers next month, leaving little scope for change even if there is a breakthrough on production quotas.

The prompt timespread for Brent was 74 cents a barrel in backwardation -- a bullish structure where near-dated contracts are more expensive than later-dated ones. That compares with 95 cents a week earlier.

Indonesia, Southeast Asia’s biggest economy, is being wracked by a brutal wave of Covid-19, with movement curbed in the industrial heartland of Java and the tourist enclave of Bali. Malaysia is still in the midst of a nationwide lockdown, while Thailand has just stepped up restrictions. Cases in the U.S. have also soared, recording the biggest weekly jump since April 2020.

More stories like this are available on bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting

Recommended Stories

  • ECB to taper pandemic buys after Sept, COVID-19 variants top risk: Reuters poll

    The European Central Bank will start tapering its pandemic-related asset purchases after its September meeting and stop buying them by the end of March, according to a Reuters poll which showed the top economic risk was new COVID-19 variants. After announcing a new strategy last week that allows the central bank to tolerate inflation higher than its new 2% symmetric target, ECB President Christine Lagarde said on Monday the bank would change its policy guidance at its July 22 meeting. While those announcements came against a backdrop of slightly more optimistic growth and inflation forecasts for this year and next, high unemployment rates in most euro zone countries are underscoring the need for caution.

  • America's depressed oil production

    Data: Baker Hughes; Chart: Axios VisualsThe demand for oil has been rising as consumers emerge from their homes, and businesses rev up to serve them. However, oil companies are dragging their feet on ramping up production, new data from Baker Hughes showed Friday.Why it matters: When production doesn't keep up with demand, it drives prices higher. Oil companies used to respond enthusiastically to rising prices by drilling more, in an attempt to cash in. Get market news worthy of your time with A

  • ByteDance Said to Have Met With Officials Over Data Security

    (Bloomberg) -- TikTok owner ByteDance Ltd. is working to ensure it complies with data security requirements before going public after meetings with Chinese government officials over the issue earlier this year, people familiar with the matter said.The Chinese tech giant, whose apps also include TikTok’s Chinese twin Douyin and the news aggregator Toutiao, had kicked off initial preparations for an initial public offering of its domestic assets, Bloomberg News reported in April. Yet ByteDance has

  • 8 Lies That Have Fueled the AMC Entertainment Pump-and-Dump Scheme

    There's arguably been no hotter stock on the planet in 2021 than movie theater chain AMC Entertainment (NYSE: AMC). At the heart of this rally are AMC's passionate army of retail investors, collectively known as "apes" -- an homage to Rise of the Planet of the Apes, where leader Caesar infers that apes are stronger together. This might sound like a feel-good story whereby retail is finally exacting its revenge on Wall Street, but the reality is that AMC has become a battleground pump-and-dump scheme driven higher almost entirely by the misinformation and lies spread by its retail investors.

  • 10 Best Gun Stocks to Invest In

    In this article, we will be looking at the 10 best gun stocks to invest in. You can skip our detailed analysis of the firearms industry, and go directly to the 5 Best Gun Stocks to Invest In. Even before President Biden was elected into office, concerns about strictly enforced gun control and new firearm […]

  • Estimating The Fair Value Of Roku, Inc. (NASDAQ:ROKU)

    How far off is Roku, Inc. ( NASDAQ:ROKU ) from its intrinsic value? Using the most recent financial data, we'll take a...

  • Buy cocoa, not crypto — the case for investing in commodities in 2021

    Commodities are a high-risk proposition, but strong performance is luring new takers.

  • 15 Best Energy Stocks to Buy Now

    In this article, we will be looking at the 15 best energy stocks to buy now. If you want to skip our detailed analysis of the energy industry, go directly to the 5 Best Energy Stocks to Buy Now. In light of a recent falling out between OPEC nations and their allies this year, oil […]

  • 2 Top Warren Buffett Stocks to Buy Right Now

    Warren Buffett is widely recognized as one of the greatest stock pickers of all time, and for good reason. During his tenure as Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) CEO, Berkshire stock has crushed the market, generating a total return of 2,810,526% between 1965 and 2020.

  • Virgin Galactic’s Stock Has Worst Day in More Than a Year

    The company’s shares fall 17% Monday, a day after sending founder Richard Branson into space, on plans to sell up to $500 million in stock.

  • Colombia Looks Offshore To Revitalize Its Oil Industry

    After a rough start to the year, marred by protests and economic crisis, Colombia’s oil industry is betting big on offshore assets in a move to revitalize production

  • Why Shares of State Auto Financial Nearly Tripled Today

    The shares of Ohio-based regional property and casualty insurance company State Auto Financial (NASDAQ: STFC) blasted through the speed limit on Monday. Privately held Liberty Mutual, a major player in the property and casualty space, announced this morning that it has signed a definitive agreement to acquire State Auto Financial for $52 per share -- hence the stock's dramatic rise over the course of the day. Liberty Mutual holds a 58.8% interest in its fellow insurer.

  • 10 Best 3D Printing Stocks to Buy Now

    In this article, we will be looking at the 10 best 3D printing stocks to buy now. If you want to skip our detailed analysis on the additive manufacturing industry, you can go directly to the 5 Best 3D Printing Stocks to Buy Now. Additive manufacturing, or 3D printing as it is more commonly known, […]

  • Guardian Fund: “Palantir (PLTR) is Becoming One of the More Important Global Software Companies”

    Guardian Fund, an investment management firm, published its second quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly portfolio return of +16.85% measured in euros, net of fees and expenses was recorded by the fund for the first half of 2021. You can view the fund’s top 5 holdings to […]

  • Is the Options Market Predicting a Spike in Humanigen (HGEN) Stock?

    Investors need to pay close attention to Humanigen (HGEN) stock based on the movements in the options market lately.

  • Oil Slips on Growing Threat of Delta Variant to Demand

    (Bloomberg) -- Oil dipped as traders grappled with the demand implications of a Covid-19 resurgence in several regions and slowing economic growth in China.Futures in New York fell 0.6% on Monday. New mobility restrictions have been introduced in parts of Japan, South Korea and Vietnam to curb the spread of the delta variant, clouding the demand outlook for oil. Confirmed Covid-19 cases in the U.S. soared 47% in the week ending Sunday, the largest weekly rise since April 2020.Meanwhile, China’s

  • Why Crypto Miners Are Leaving Quebec

    Two large bitcoin miners are leaving Quebec because of restrictions on the use of power to run their operations.

  • Crude Oil Price Forecast – Crude Oil Markets Continue to Test Recent Highs

    The crude oil markets have pulled back just a bit during the trading session on Monday to kick off the week but have pulled back a bit from the recent highs.

  • U.S. Senate faces 'hell of a fight' amid doubts over infrastructure investments

    The U.S. Senate returned on Monday to one of its most ambitious agendas in years, with Democratic President Joe Biden seeking trillions of dollars in infrastructure spending and Republicans promising "a hell of a fight" against tax hikes to pay for it. Senate Majority Leader Chuck Schumer opened the Senate following a two-week July Fourth recess, saying progress was being made on both a bipartisan $1.2 trillion infrastructure plan https://www.reuters.com/world/us/whats-us-senates-12-trillion-infrastructure-plan-2021-06-24 and the first step toward another measure that would pass with only Democratic votes. But given the 50-50 split in the Senate, it was uncertain whether the Democratic leader could fulfill his goal of passing both measures through the chamber by sometime in August.

  • General Motors Preparing to Shock EV Industry

    The electric vehicle (EV) market has exploded over the last couple years, with multiple firms exclusively manufacturing the automobiles and even developing software and batteries in-house. Tesla, Inc. (TSLA) was one of the first to be considered as more than just a traditional auto retailer. As the technologies involved in the cars advance and more investment pours in, the EV market looks set to continue its rise for years to come. And now, even some of the oldest, most legacy auto manufacturers