Oil slipped after hitting $ 70 a barrel for the first time since October 2018, after a rally driven by signs of market tightening stopped.
Futures fell 0.3 percent in New York after rising 0.6 percent earlier after a second straight week. The dollar rose higher, making commodities valued in the currency less attractive, while the technical indicator signaled that oil was approaching the repurchased territory. Prospects still remain positive, with major trader Vitol Group saying OPEC + seems to be in control raw prices.
The strong recovery of the virus in the United States, China and Europe has led to a price increase of more than 40% this year, although the return of Covid-19 to Asia reminds that the recovery will be uneven. Meanwhile, Russia’s PJSC Rosneft has warned of what lies ahead shortage of supply, as global producers are increasingly directing their funds to a “hasty” energy transition.
“The focus remains on demand, with traffic data suggesting that the summer driving season should be positive,” said Daniel Hines, senior raw materials strategist at Australia and New Zealand Banking Group Ltd. “The market needs to tighten even more in the coming weeks.”
The market has strengthened in a bullish structure. The rapid spread of time for Brent is 41 cents in the opposite direction – where prices on older dates are more expensive than later ones. That compares to 37 cents a week earlier.
The decline in US drilling and production is facilitating OPEC +’s management of markets, Mike Mueller, Vitol’s head of Asia, told a conference on Sunday. Given the delay in talks between Tehran and global forces to resume the nuclear deal, more Iranian raw materials are less likely to hit the market before the fourth quarter, he added.
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“With Keith Gossman’s help.”