Saudi Arabia Provides Support For Brent Crude Bulls

Crude oil bulls ended the previous week on a relatively bullish note, shaking off a steep loss recorded last Monday to end the week with decent gains.

Oil prices have relatively been volatile as oil traders fear the rising global delta variant infection rates could undermine global economic recovery most especially in key parts of Asia.

Brent crude futures surged quickly back above $74 a barrel in the past week held above there, with sights set back on this month’s highs around $77.82 a barrel.

Still, credit must be given to the Saudis perhaps for being the most conservative when it came to adding crude oil output back after acting in balance act best served on taming crude oil supplies amid giving up some market share.

In the process, the Oil kingdom had to reduce more of its energy supplies than it agreed to, while other OPEC producers remain relatively uncompliant.

Although some form of price stability stays in play as demand growth is expected to outpace supply, thus draining the oil glut that built up during the COVID-19 pandemic with OPEC agreeing to bring back 400,000 barrels per day starting from next month.

Another 400,000 barrels per day is set to be brought back into the energy market in September and every month that follows until the curbs have been rolled back entirely.

Worries remain elevated over near-term demand weakness with concerns surrounding COVID-19 mutant strains gaining intensity and the trend of new restrictions staging a big comeback across Australia, Europe, and Southeast Asia.

Therefore, Brent Crude Bulls will need to break above the $75 a barrel price bands in the near term in avoiding any sort of downsides pressures again.