The price of crude oil was substantially down on
Thursday with WTI and Brent hitting as low as 67.27 and 66.11 respectively as
of 17:30 GMT. Both benchmarks lost over 3.3% in a day.
The outbreaks of the Delta variant of the
Coronavirus, coupled with weak economic data from China, have resulted in the
fall, which has been continuing for the week.
The speculation about the end of the US stimulus
package, meanwhile, has added yet another dimension to the collective anxiety
of both the investors and traders alike.
In the current circumstances, analysts are not in a
position to predict the short-term progress – or decline - in the sector
either.
The Arabic media, meanwhile, says a tanker with Iranian
oil is going to crisis-hit Lebanon, citing an declaration from the leader of Hezbollah,
the Iranian-backed militant group in Lebanon. Since Iran is still under US-led
sanctions, how – and when - it will reach Lebanon is anybody’s guess.
Since the attack on the Israel-registered tanker in
the Gulf of Oman, the tension in the region has remained high. Whether the move
by the Hezbollah is an act of flexing the military muscles or addressing a dire
economic need remains to be seen; the debacle in Afghanistan has the potential
to embolden the militant outfits in the region – and beyond.
Up until the time of writing this piece, the US Navy
has not said anything in response to Hezbollah’s move. They may be watching the
evolving scenario with a heavy focus, though.
All in all, the climate of anxiety does not seem to
go away soon so that the crude oil markets can breathe a long sigh of relief. It
may take a considerable time before dust settles down.
