Oil losses over 7% as OPEC+ agrees to boost supply, delta insurgence weighs



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Oil losses over 7% as OPEC+ agrees to boost supply, delta insurgence weighs

On Monday, both US and UK crude oil futures’ prices had been hit with hefty whiplashes to round off the day more than 7 per cent lower, remarking their worst intra-session plunge since March as OPEC+ member states had reached an accord on Sunday to boost up supplies by 2 million barrels per day (bpd) or 0.4 million bpd per month between August and December, while an insurgence in delta variants with the United States and UK witnessing daily cases climbing over a six-month peak, had weighed on investors’ sentiment.

Nevertheless, since it remains unclear how the latest upsurge in delta variant cases would impact global crude oil consumptions, in the day’s clattering downward spiral in crude oil futures’ prices was almost entirely prompted by the OPEC+ decision to downsize output curbs by 2 million barrels per day by end-2021.

In point of fact, earlier this month, the 14-member OPEC alongside its Russia-backed allies had called off a policy meet following a gruesome spat between UAE and Saudi, as UAE had strongly rejected a Saudi proposal to curb output at least until end-2022 without additional allocation for UAE, however, the latest deal came forth as a triumph for the Emirati nation, but Saudi Energy Minister had declined to disclose how the latest deal would compromise UAE’s output curb.

Crude oil nosedives as OPEC+ reaches accord on supply boost

Citing statistics, in the day’s commodity market wind down, UK crude had wrapped up the day 6.8 per cent lower to $68.62 per barrel, while US West Texas Intermediate crude oil futures scheduled to be delivered by August had taken a tattering header of 7.5 per cent, winding up the day at $66.42 a barrel.

Meanwhile, addressing to a growing fear of a pandemic resurgence amid a rapid rise in delta variants across the globe, a senior analyst at Price Futures Group in Chicago, Phil Flynn said, “The market is very fixated on the potential for the Delta variant exploding. Because of that, we're getting a run on the bank.