Despite a major oil price crash on Monday, oil prices are now on course to close out the week more or less unchanged. 

The news of OPEC+ bringing back withheld production in August 2021, following through with 400 kbpd monthly increments over the remainder of this year, triggered a spectacular tumble in oil prices earlier this week. Despite pandemic-related risks surging in Southeast Asia and U.S. crude inventories rising for the first time since May, the second half of the week saw a surprising rebound as the market has grown to realize that additional OPEC+ supply would be offset by recovering global demand, Oilprice said.

Members of the Organization of the Petroleum Exporting Countries and other producers including Russia, collectively known as OPEC+, agreed on a deal to boost oil supply by 400,000 barrels per day from August to December to cool prices and meet growing demand.

But as demand was still set to outstrip supply in the second half of the year, Morgan Stanley forecast that global benchmark Brent will trade in the mid to high-$70s per barrel for the remainder of 2021. In the end, the global GDP (gross domestic product) recovery will likely remain on track, inventory data continues to be encouraging, our balances show tightness in H2 and we expect OPEC to remain cohesive.

Barclays analysts also expected a faster-than-expected draw in global oil inventories to pre-pandemic levels, prompting the bank to raise its 2021 oil price forecast by $3 to $5 to average $69 a barrel.

Russia may start the process of banning gasoline exports next week if fuel prices on domestic exchanges stay at current levels, Energy Minister Nikolai Shulginov said, further signalling tighter oil supplies ahead.

Crude inventories in the United States, the world’s top oil consumer, rose unexpectedly by 2.1 million barrels last week to 439.7 million barrels, up for the first time since May, U.S. Energy Information Administration data showed. Inventories at the Cushing, Oklahoma crude storage hub and delivery point for WTI, however, has plunged for six continuous weeks, and hit their lowest since January 2020 last week. Gasoline and diesel demand, according to EIA figures, also jumped last week, Reuters said.

Coal prices surge to highest level in more than decade.Decreasing Chinese domestic production, unrest in South Africa, and weak hydro generation across the continent have pushed Asian coal prices to their highest level in 13 years, with Newcastle thermal coal FOB prices flirting with the $150 per metric ton threshold, double of what it was in early May.

US natural gas futures rose to their highest level since December 2018 on the heels of warmer-than-expected weather and higher air conditioning power demand, writes Reuters. The front-month NYMEX Henry Hub futures for August surpassed the $4 per mmBtu mark, rising more than 55% this year to date, Oilprice said. 

Oil Prices Recover 

Despite a major oil price crash on Monday, oil prices are now on course to close out the week more or less unchanged. 

The news of OPEC+ bringing back withheld production in August 2021, following through with 400 kbpd monthly increments over the remainder of this year, triggered a spectacular tumble in oil prices earlier this week. Despite pandemic-related risks surging in Southeast Asia and U.S. crude inventories rising for the first time since May, the second half of the week saw a surprising rebound as the market has grown to realize that additional OPEC+ supply would be offset by recovering global demand, Oilprice said.

Members of the Organization of the Petroleum Exporting Countries and other producers including Russia, collectively known as OPEC+, agreed on a deal to boost oil supply by 400,000 barrels per day from August to December to cool prices and meet growing demand.

But as demand was still set to outstrip supply in the second half of the year, Morgan Stanley forecast that global benchmark Brent will trade in the mid to high-$70s per barrel for the remainder of 2021. In the end, the global GDP (gross domestic product) recovery will likely remain on track, inventory data continues to be encouraging, our balances show tightness in H2 and we expect OPEC to remain cohesive.

Barclays analysts also expected a faster-than-expected draw in global oil inventories to pre-pandemic levels, prompting the bank to raise its 2021 oil price forecast by $3 to $5 to average $69 a barrel.

Russia may start the process of banning gasoline exports next week if fuel prices on domestic exchanges stay at current levels, Energy Minister Nikolai Shulginov said, further signalling tighter oil supplies ahead.

Crude inventories in the United States, the world’s top oil consumer, rose unexpectedly by 2.1 million barrels last week to 439.7 million barrels, up for the first time since May, U.S. Energy Information Administration data showed. Inventories at the Cushing, Oklahoma crude storage hub and delivery point for WTI, however, has plunged for six continuous weeks, and hit their lowest since January 2020 last week. Gasoline and diesel demand, according to EIA figures, also jumped last week, Reuters said.

Coal prices surge to highest level in more than decade.Decreasing Chinese domestic production, unrest in South Africa, and weak hydro generation across the continent have pushed Asian coal prices to their highest level in 13 years, with Newcastle thermal coal FOB prices flirting with the $150 per metric ton threshold, double of what it was in early May.

US natural gas futures rose to their highest level since December 2018 on the heels of warmer-than-expected weather and higher air conditioning power demand, writes Reuters. The front-month NYMEX Henry Hub futures for August surpassed the $4 per mmBtu mark, rising more than 55% this year to date, Oilprice said.