ISLAMABAD: Crude oil prices snapped the seven-session losing streak on Monday and jumped over 3 percent after China contained the spread of the fast-spreading delta variant of the coronavirus and reported zero local cases.
At 1245 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $2.02 (+3.28 percent) to reach $67.32 a barrel. Similarly, the US West Texas Intermediate (WTI) reached $64.14 a barrel, up by $2 (+3.23 percent).
The price for Opec Basket was recorded at $66.08 a barrel with 4.78 percent decrease, Arab Light was available at $67.68 a barrel with 0.13 percent decrease, while the price of Russian Sokol slipped to $66.43 after shedding 0.03 percent.
Both Brent and WTI lost 10 percent of their values earlier this month as new lockdowns to contain the more virulent delta variant curbed demand. Oil prices recovered after falling to their lowest level since May last week.
Commodities, including oil, fell last week after the minutes of the US Federal Reserve’s July meeting, which indicated a reversal of the US central bank’s quantitative easing policy has been in place to support the economy since the onset of the pandemic. The strengthening of the US dollar amid global risk-off sentiment was also a factor affecting commodity prices.
Oil markets also await the next move of Opec+, the group controlling a significant portion of oil market supply. The alliance is set to meet on September 1. Opec+, which is led by Saudi Arabia and Russia, has come under pressure from the White House to bring more supply back to the markets.
The group is already pumping an additional 400,000 barrels per day and plans to return 2 million bpd by the end of the year. The Opec+ group is expected to maintain its plans to gradually increase output at its September meeting, if prices stabilise around the current levels in the coming weeks.
“However, if the downward pressure on oil prices continues due to weak demand conditions, tweaks to the planned increase in Opec+ production cannot be ruled out.