Crude Oil Prices Set For Their Biggest Monthly Loss Since October

The price of oil declined Tuesday morning in London, set to record its biggest monthly loss since October 2020. When it meets later in the week, the Organization of Petroleum Exporting Countries and its allies are likely to improve production further.

Following Hurricane Ida’s passage through the region this weekend, crude oil production on the Gulf Coast is also slowly being restored.

This report was drafted when Brent oil futures were near $72 a barrel.  According to the daily chart, since the bottom of the downward trend channel was established on July 6, West Texas Intermediate Futures have been under intense pressure.

Currently, the price is hovering near the $69 mark after retracing back to the $61.73 levels made on August 23.

As of now, U.S. oil is trading below the 50-day Simple Moving Average (SMA), which indicates weakness in the energy derivative

In response to reports released by the U.S. Bureau of Safety and Environmental Enforcement (BSEE) on Monday, the black viscous hydrocarbon price remains above key support levels after 1.72 million barley per day (bpd) of oil production in the U.S. Gulf of Mexico are still shut off from 288 platforms as a result of evacuations.

A meeting of OPEC+ is scheduled for Wednesday, where production is expected to be increased by another 400,000 barrels per day as the fuel demand outlook improves.

Local refineries should take longer to get back into production in the Gulf of Mexico after Hurricane Ida, despite the restoration of crude production gradually.

The American Petroleum Institute is due to release U.S. crude oil supply data later in the day.

In the month of August, investors reacted to global COVID-19 outbreaks with the Delta variant in addition to the dollar’s volatility.

In recent weeks, the tide has turned, with the market more confident that the recovery in demand was not thrown off by the COVID-19 Delta variant.