Oil opened the week little changed after a run of four monthly gains on signs that rising vaccine-aided demand was draining stockpiles, offsetting the risk posed by the spread of the delta virus variant.
West Texas Intermediate slipped 0.2% in early Asian trading, after climbing 2.6% last week. In the U.S., Anthony Fauci, the nation’s top infectious disease doctor, said Covid-19 vaccines work extremely well and that a return to the lockdowns of 2020 is unlikely, boosting the outlook for energy consumption.
Traders were also monitoring an uptick in tensions betweenIran and the U.S.Washington has formally blamed Tehran for a deadly attack on an Israel-linked oil tanker off Oman, warning of an “appropriate response”. The standoff comes as the two nations are seeking to revive a nuclear accord that, if successful, may pave the way for an end to U.S. sanctions on Iranian oil flows.
Oil has soared this year -- rising every month apart from March -- as the global economic recovery from the pandemic stoked consumption. With activity picking up, crude stockpiles held at the key Cushing hub in Oklahoma have dwindled to the lowest level since January 2020. Against that backdrop, the Organization of Petroleum Exporting Countries and its allies have been easing supply curbs, with more barrels to be released this month.
The surge in oil will probably go on as the recovery from the pandemic continues, according to Dubai-based Kentech Corporate Holdings Ltd. Prices are “going up,” John Gilley, chief executive officer of theprivately heldoil and natural gas services provider, told Bloomberg Television on Sunday.
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