Amid doubts about the production plans of the Organization of Petroleum Exporting Countries and Allies (OPEC+) for the coming months, the price of oil fell sharply. Also, the market is cautiously observing the impacts of the delta variant of the coronavirus, which has generated new restriction measures in various parts of the world, posing risks for demand.
This oil low also has two other components: China announces a drop in its GDP forecast, still on the rise, but of only 5%, and the reheating of political savages between the United States and Russia. Remember: Russia controls almost all natural gas supplies to Eastern Europe and part of Western Europe.
On the New York Mercantile Exchange (Nymex), a barrel of WTI oil with delivery scheduled for August closed down 0.62% (-US$ 0.46), to US$ 74.10, while Brent oil for the month The next one dropped 0.52% (-US$ 0.39) on the Intercontinental Exchange (ICE), to US$ 75.16.
The World Health Organization (WHO) has been recommending caution in the pace of economic reopening, since the delta variant of the new coronavirus is spreading to many regions.
Japan, Indonesia and Thailand renewed mobility restrictions. In Australia, the situation is also worrying and cases are increasing, although Sydney is already under a new lockdown.
The trend implies uncertainty for demand, as it tends to restrict activity. In addition, Japan's announcement of reviewing the opening of the Olympic events to the public creates extra uncertainty about the control of this new variant and the success of the Olympics themselves.
Last week, OPEC+ was unable to reach an agreement on its future offer, and the impasse has created uncertainty for the market. Doubts for production from August, although with an upward bias at first sight, have now sowed "enough confusion and discord that the market does not fully trust the alliance to maintain a stable oil price gains trajectory", he says. Rystad Energy.
Ale goes on to clarify: "There is concern that ongoing disagreement over the way forward for OPEC+ could lead to rebellion by some members and unrestricted production that could flood the market with more oil than it can absorb."
"The prospect of unrestricted oil production by OPEC+ producers, together with what could be a new pandemic wave, is a bearish scenario that has maintained a reasonable cap on price gains and helped to reduce speculation," ends the Rystad Energy consultancy.
From this perspective, it is undeniable that those who work with oil assets, where the leverage rate exceeds 100x, usually, on these occasions, migrate capital to markets that offer less risk with the same prospects of gain.
At this moment, the only markets that offer such conditions are the Brazilian stock exchanges - which is undergoing a turbulent investigation of government corruption in the purchase of vaccines and the cryptocurrency market, much more stable and shielded from government actions.
With this, the volume of business in cryptocurrencies should increase in the coming months, mainly in bitcoin and ethereum, stable currencies with great appeal, since both are in a stagnation, waiting for the market to react.
The picture looks promising - despite the deaths of the pandemic and this new strain.
For the cryptocurrency market it is good news and good capital action.
But for the world at large, it means that the pandemic is still far from being fully controlled, even with existing vaccines, which will bring extra volatility due to the delay in the global economic recovery.
Nothing justifies the loss of human life.
Nothing acquiesces the lives that are gone!
Waiting is necessary, to find out about business, and to return to the less abnormal daily life of the last year and a half.
Good luck everyone!
