Closing the session 7/8, Brent oil futures fell 1.5% to 44.4 USD / barrel. WTI oil futures price decreased 1.7%, to 41.22 USD / barrel. However, at the end of the week, Brent oil price still increased by 2.5%, WTI oil price increased by 2.4%, showing that the energy market is in danger of going down further.
“Maintaining current prices would be unrealistic,” said Bjornar Tonhaugen, an analyst at Rystad Energy. “Traders are rushing to adjust prices, worried ‘invisible enemy’ Covid-19”.
The increasing number of Covid-19 infections remains the most influencing factor in the fuel demand outlook. The situation in the US has not been positive, while India has recorded a record number of new infections. More than 700,000 people worldwide have died from the pandemic, with more than 160,000 in the US alone. The University of Washington model predicts that the US figure will hit 200,000 on October 1.
The US Department of Labor said on August 7 that the country’s economy created only 1.8 million jobs in July, significantly down from 4.8 million jobs the previous month, due to the influence from Covid-19. . The July employment report also helped USD recover from the recent non-brake drop, putting pressure on oil and other commodities.
The DXY index, which measures USD strength against 6 other major currencies, rose 0.7% in the session of August 7 to 93.39, the strongest increase since March.
Crude inventories in the US for the week ended July 31 fell 7.4 million barrels, according to the US Energy Information Administration (EIA), exceeding the forecast of a 3 million barrel drop from analysts.
US energy companies this week reduced four oil and gas rigs to 176, the lowest since July 2005, according to the Baker Hughes energy services company.
Here are some events that could affect oil prices for the week.
The American Petroleum Institute estimates weekly inventory figures.
EIA updates inventory data of crude oil, gasoline and refined products weekly.
Baker Hughes updated the number of US oil rigs operating.
Gold was still the commodity that attracted the attention of the week before continuously setting new historical peaks but was sold off in session 7/8. Specifically, the spot gold price in New York dropped by 28.4 USD to 2,034.8 USD / ounce. Gold futures price decreased 2% to 2,028 USD / ounce.
This precious metal price set a historical peak in the session 6/8 with the spot gold price at one time reaching 2,069.21 USD / ounce, the gold price for October delivery was at 2,070 USD / ounce, the gold for December delivery to 2,089.2 USD /ounce.
Since the beginning of the year, gold is still up about 32% while silver is up more than 52%.
Analysts still have mixed views on the gold market. The positive ones believe that the next goal is to conquer the 2,100 USD / ounce mark. Others believe that the price of gold may decline.
“One scenario is that gold prices fell during the beginning of the week,” said James Staley, gold technical strategist at Daily FX. Staley also does not exclude the possibility that the price of gold causes surprise, continues to increase.
At this time, few people think that the support threshold of USD 2,000 / ounce will be breached.