Oil futures: Prices ease towards daily lows on nagging Delta concerns

27 Jul 2021

Quantum Commodity Intelligence – Crude oil futures eased towards the day's lows in late London trade Tuesday, as nagging concerns over the Delta Covid-19 variant weighed on otherwise upbeat demand data.

Front-month September Brent futures were trading at $74.17/barrel (1640 GMT), compared to Monday’s settle of $74.50/b.

At the same time, September WTI was trading $71.24/b, versus Monday’s settle of $71.91/b.

"The expectation is that prices will be rangebound this week amid lower liquidity and a parring of the real delta dip last Monday, though fresh bearish questions have emerged in the East," noted brokers Eagle Energy Brokers.

"Downwards pressure persists amid Delta variant spikes, flooding and typhoons in China, both destabilising the demand narrative near-term."

"However, capping losses are reports that despite Delta spikes in the West, little impact is seen on road traffic in major cities."

Mobility data from Google and Apple showed most major economies were seeing healthy growth in activity last week, aside from continued falls for major oil consumer Indonesia and mixed data for India.

Flight numbers in Europe rose 4.4% last week to almost reach 70% of 2019 levels, data from Eurocontrol showed Monday.

The GasBuddy website, which tracks gasoline demand and retail prices, expects this week’s Energy Information Administration figures to show a small increase in US gasoline demand, up to 9.35 million bpd.

A Reuters poll of analysts estimates U.S. crude stocks fell by about 3.4 million barrels and gasoline stocks fell by 400,000 barrels in the week to July 23.