The crude market has had trouble maintaining a positive price momentum as concerns grow that the delta-variant may be slowing demand. Bart Melek, Head of Commodity Strategy at TD Securities, expects WTI to edge lower in the near-term.
Demand concerns a key impediment to pil rally
“The modest oil inventory draw still leaves crude vulnerable to an additional correction as traders express concerns surrounding the delta-variant's negative impact on demand, at the same time as OPEC + intends to increase supply by some 400k b/d in each of the coming months this quarter.”
“We continue to see WTI crude fall back to its support levels modestly below $65/bbl in the relative near term.”
“Positive developments in China should serve as protection against a rout and should drive prices sharply higher, should the covid outbreak be contained and concerns moderate.”