Oil’s Rally Faltering, Where is the Crude Oil Heading??

Oil prices fell for a second session on Tuesday, June 29, on concerns about slowing growth in fuel demand, as the outbreak of the most contagious delta from Covid-19 imposes new restrictions on movement around the world.

Brent crude futures were down 26 cents, or 0.4%, at $74.42 a barrel, after falling 2% on Monday.

US West Texas Intermediate crude futures fell 19 cents, or 0.3%, to $72.72 a barrel, extending the 1.5% loss incurred on Monday.

The rise in Delta cases comes as the Organization of the Petroleum Exporting Countries (OPEC), Russia and allies of the group known as OPEC+ are due to meet on June 1 to discuss easing supply restrictions.

OPEC demand forecasts show that in the fourth quarter of the year, global oil supply will fall below demand by 2.2 million barrels per day, giving producers some room to agree to increase production.

Analysts say that OPEC will raise supplies in August, as the market is tightening due to strong growth in fuel demand in the United States and China, the world’s largest consumers of crude.

Spain and Portugal, the two favorite summer vacation destinations for Europeans, imposed new restrictions on Britons who did not receive the vaccine, while 80% of Australians face stricter restrictions due to the spread of the virus across the country.