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On Monday, July 12, crude oil prices closed lower, as concerns over the recovery in demand and the lack of agreement on OPEC’s production policy exerted downward pressure on oil prices. The WTI crude oil spot contract for August on the New York Mercantile Exchange closed down $0.46, at $74.10 per barrel, a decline of 0.62%. The Intercontinental Exchange’s Brent crude oil front-month contract closed down $0.39, at $75.16 per barrel, a decline of 0.52%. Shanghai crude oil prices rose in the overnight session, with the key contract SC2108 closing at 451.2 yuan per barrel, an increase of 0.6 yuan per barrel or 0.13%. Regarding news factors: On July 12, finance ministers from G20 countries warned that although the global economic outlook has improved since the G20 meeting in April thanks to vaccines and economic support measures, the recovery remains fragile amid the rapid spread of virus variants such as Delta. The final communique stated that this recovery is characterized by significant differences **between regions and within countries**, and it still faces downward risks, particularly due to the spread of new variants of the coronavirus and uneven vaccination rates. Although the G20 **committed to using all policy tools to combat the COVID-19 pandemic, Italy, the host country of the meeting, said that countries agreed to avoid imposing new restrictions on the public. On July 12, OPEC sources said that as of now, OPEC has not made any progress in bridging the differences between Saudi Arabia and the UAE. Last week, the significant differences between the two countries prevented OPEC from reaching an agreement to increase crude oil production, and those differences remain unresolved; this means it is unlikely that OPEC will hold another meeting on production policy this week. On July 12, the Kremlin stated that Russian President Putin has no plans to hold talks with OPEC leaders at the moment. Russian Deputy Prime Minister Novak continues to serve as Moscow’s special envoy to OPEC, and no other contacts are planned for the time being. Russian President Putin and U.S. President Biden did not discuss the OPEC issue over the phone last week. On July 12, according to the U.S. Energy Information Administration’s (EIA) monthly drilling capacity report, crude oil production from seven major shale formations is expected to increase by 42,000 barrels per day in August, reaching 79.07 million barrels per day, while the increase in production in July was 28,000 barrels per day. The main driver of this increase is the rise in production from the largest oil field, the Permian Basin; crude oil production in that region is expected to increase by 53,000 barrels per day that month, offsetting the expected decline in production from the Bakken fields in North Dakota. Source: Shandong Huaxing Petrochemical Group Co., Ltd