Oil rebounded on Thursday morning, pushing up U.S. energy stocks higher, after three days of declining crude prices over concerns about global oil demand with rising COVID cases in major economies.
Oil prices were up early on Thursday, despite continued concerns that renewed restrictions in China could hit oil demand in the world’s largest crude oil importer. In addition, many countries in Southeast Asia, where the vaccination rates are low, have been seeing a spike in new COVID cases in recent weeks, which also doesn’t bode well for Asian oil demand as a whole.
As of 11:38 a.m. EDT, WTI Crude was up 1.69% at $69.32 and Brent Crude traded at $71.46, up 1.53%.
Wednesday’s EIA inventory report wasn’t very constructive for oil prices either, as the administration reported a crude inventory build of 3.6 million barrels for the week to July 30, against analyst expectations of a 2.9-million-barrel draw.
But oil prices steadied on Thursday morning, driven by “mild bargain-hunting buying,” Vanda Insights said early today.
In the EIA report, “Weekly as well as four-week averages of US gasoline and distillate demand continued to point to a healthy recovery, but that sits in the rear-view mirror as the latest Delta scare in the market centres around the future trajectory of consumption,” Vanda Insights noted.
Tensions in the Middle East over the attempted hijacking of a tanker in the Gulf of Oman lent some support to oil prices on Thursday, the day Iran’s newly elected President Ebrahim Raisi was sworn in. The transfer of power in Iran comes amid tensions in Middle Eastern waters, while the oil market is also looking at clues about when the Iran nuclear talks could resume after the new president is now in power.
The rebound in oil prices pushed higher the stocks of many energy companies, including ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX), Shell (NYSE: RDS.A), ConocoPhillips (NYSE: COP), and Diamondback Energy (NASDAQ: FANG), all of which were rising just before noon EDT.
By Tsvetana Paraskova for Oilprice.com
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