The crude oil price that saw a precipitous fall on
Monday recovered lost ground somewhat on Tuesday, perhaps owing to the modest
inventory draw predicted by the API, American Petroleum Institute, for the week
ending August 6.
The API said there was a draw of 0.86 million
barrels during the period it referred to.
As of 10:00 GMT, both the rate of rise and the rise
itself were fairly diffident; both WTI and Brent recorded less than 1% gain
relative to what it was on Tuesday.
Both analysts and investors are awaiting the next
inventory forecast by the EIA, US Energy Information Administration, on
Wednesday; last week the forecasts by the API and the EIA were different,
though.
The EIA, in its weekly figures, declared that there
was a US crude inventory build-up for the period ending August 3 – 3.6 million
barrels. The unexpected development left the crude oil markets tumbling, owing
to the cumulative impact of the other uncertainties as well.
The exponential rise in the spread of the new Delta
variant of the Coronavirus across the globe is the main cause of decline in
demand for the crude oil; the situation is getting worse in Asia, where the key
importers are grappling with the surges of the pandemic, despite the relative success
in vaccinating the populace.
The tension in the Gulf of Oman – and the region –
has not left the field of view of the investors either; the danger to oil
tankers is still high.
Against this backdrop, the talks on reviving the
JCPOA, 2015 Iranian nuclear deal, continue to be in a state of limbo. That
means there is no prospect of Iranian oil returning to the markets in great
volumes as things stand, unless the new Iranian administration makes a significant
move to break the impasse.
