Oil prices fell for the second day in a row during the early morning of 29 September 2021. According to economic correspondents this was caused by doubts regarding oil demand, in the situation where Covid-19 cases are still growing worldwide. The price of oil has fallen even though in some regions of the world, most notably in the United Kingdom, there is a critical shortage of fuel and especially gasoline. Analysts say the fuel crisis in Britain is the worst in more than 70 years.
On 29 September 2021, at 8:11 am CET, West Texas Intermediate (WTI) light crude oil traded on the New York Mercantile Exchange (NYMEX) commodity market at US$ 73.97 a barrel with the current daily price decrease of -1.75%. At the time mentioned the WTI’s European counterpart, Brent North Sea crude oil, traded on the Intercontinental Exchange Europe (ICE) commodity market at US$ 77.74 a barrel with a daily decline of -1.71%. However, in a year-on-year comparison, these current prices still represent a very significant increase in their price, despite this two-day decline. In relation to the WTO oil, according to technical analysis data, this is an increase of 75.41% over the last 52 weeks. The annual comparison of Brent North Sea shows an annual increase of 74.32% over the last 52 weeks, economic correspondents added.
According to this comparison, oil prices are rising as economies recover from pandemic blockades and demand for fuels increases, while supply disruptions have occurred in some producer countries. It is in this context that financial strategists draw attention to the situation where the oil industry, oil producers and especially traders and investors have once again raised concerns regarding lower demand for oil and, as a result, there has been a current fall in oil prices on the world commodity market. Traders expect the Organization of the Petroleum Exporting Countries (OPEC) and its allies (especially the Russian Federation), commonly known as OPEC+, to choose to maintain stocks tight. This nervousness of the market arises precisely in a situation where OPEC and OPEC+ have joint negotiations next week. However, demand for oil is expected to increase significantly over the next few years, OPEC predicted on Tuesday, 28 September 2021.
However, from the analysts’ point of view, OPEC’s statement sounds more like a warning that the world must continue to invest in oil production to avert a crisis, even as it shifts to less polluting forms of energy. The weakening Chinese housing market and growing power outages have hit sentiment, as any downturn in the world’s second-largest economy is likely to have an impact on oil demand, analysts said. After the United States, China is the world’s largest importer of oil and the second largest consumer of fossil fuels. According to market sources US stocks of oil, gasoline and distillate inventories rose last week, citing Tuesday’s data from the American Petroleum Institute. Last week oil stocks increased by 4.1 million barrels in the week. Gasoline stocks rose by 3.6 million barrels and distillate stocks rose by 2.5 million barrels, according to sources speaking on condition of anonymity.