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Oil rises, erasing last week's losses

24 Aug 2021 05:33 PM

Oil prices rose during today's trading, extending the strong gains on the back of expectations of higher demand as the US Drug Administration issued the first full approval of the Coronavirus vaccine, while Mexico suffered from a major interruption in production.

Brent crude prices have risen so far since the beginning of today’s trading by about 3%, and since the beginning of this week’s trading, crude has managed to rise by about 9%, almost erasing last week’s losses, to trade again around the levels of $70, as is the case with WTI crude, which managed to rise since the beginning of the week's trading by about 8.8%, and it is trading above the levels of $67.

Crude's rise came supported by the weakness of the US dollar, after both crudes suffered their biggest weekly losses in more than nine months last week.

On Monday, the US Food and Drug Administration (FDA) issued full approval for the two-dose Pfizer-Biontech vaccine, after it authorized its emergency use last December. Health officials hope this measure will convince unvaccinated Americans that the vaccine is safe and effective.

China's apparent success in combating the spread of variant delta has also boosted demand sentiment, as oil prices were supported by a fire at an oil platform off Mexico on Sunday, which killed five workers and halted production of 421K barrels per day, which represents about a quarter of the country's total production.

The US Department of Energy said on Monday that it will sell up to 20 million barrels of crude oil from the Strategic Petroleum Reserve to comply with legislation, with deliveries to take place between October 1 and December 15. Meanwhile, Indian refiners' crude production in July jumped to a three-month high as demand for fuel recovered and prices supported.

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