Concerns over the trajectory of the rapidly-spreading Delta variant of Covid-19 start to weigh on the black gold’s price.
In the latest commodity charts in Asia, the Brent crude declined by $0.35 or $75.20 a barrel. Nevertheless, the European benchmark retains a strong grip on the $75.00 a barrel threshold, hinting a bullish sentiment dominance.
Meanwhile, the West Texas Intermediate steadied at $74.23 a barrel after declining $0.33 during the session.
Analysts noted that how the Delta variant situation will unfold over the next weeks will significantly affect oil price.
For the record, the strain has apparent “immunity” from the vaccines available in the market today.
This risk comes with OPEC’s indecision which managed to weigh on the market since a week ago.
The oil association’s member states failed to reach a consensus during their ministerial meeting on the forward movement of the bloc’s production.
Inside sources pointed at the United Arab Emirates’ opposition to being the main cause of the disarray. This led to the postponement of the final decision for the third consecutive time.
As of late, the elite organization’s ministers are still deliberating on the next steps to take.
The Delta situation, along with the Organization of the Petroleum Exporting Countries’ indecision, will continue to weigh on the oil market, analysts warned.
A Singapore-based commodity expert said that the impact of the events may not be felt now, but these will hit demand soon, should the situation does not improve.
The expert added that oil price will remain volatile over the next few weeks due to the impasse.
This is despite the significant improvement in US crude stockpiles week after week. Both EIA and API recorded an improvement in inventory last week.
Natural Gas Price Eyed
As the certainty of uncertainty in crude oil trading takes dominance, investors’ focus now shifts on other commodities.
In a projection, commodity strategists noted that natural gas still has a big room for a hike. This is despite the significant run it managed to settle during the first half of the year.
Currently, prices more than doubled compared to last year’s record-lows after nursing the devastating effects of the pandemic.
On the other hand, consumption of the commodity is likely to decline in the United States this year as a way to cool down skyrocketing prices.
Nevertheless, natural gas is currently living the dream of clinching its highest price since more than two years ago.
