GOLDWELL：Daily Market Recap – USOIL OPEC+ agreement and Delta variant cause prices to plunge

Oil prices fell after OPEC and its allies agreed to end oil production cuts but also because the spread of the pandemic poses a risk to the strength of demand.

The group has agreed to increase production by 400,000 barrels per day on a monthly basis starting in August, as it prepares to phase out production cuts of about 5.8 million barrels per day by September 2022.

The problem is that the floodgates are being reopened just as a significant risk to demand is emerging due to the delta variant. The highly transmissible Covid variant, which has spread to more than 100 countries, is driving cases to record levels in several countries. In particular, Covid cases have rebounded in the United States, the world's largest economy, this month as the delta variant spreads among unvaccinated people. The U.S. is averaging nearly 30,000 new cases per day in the last seven days ending Friday, compared with an average of about 11,000 cases per day a month ago.

However, the medium-term trend remains positive above the 200-period moving average and the current downtrend is only a correction. We will therefore watch for any reversal pattern to reposition ourselves above this moving average.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.