Yesterday oil futures markets dropped in light of a possible slower decline of world oil production and the fact that U.S. crude oil inventories increased, contradicting the analysts' expectations.
In its recently released Short-Term Energy Outlook report, the U.S. Energy Information Administration reported that it expects domestic oil production to decrease by 600,000 barrels per day, which is a slower decline than the previously forecasted.
The organization also revised up its oil price forecasts for this year, as they envisage that the West Texas Intermediate crude oil prices will be at $37.55 per barrel this year, which is higher than their June forecast, and that the Brent crude oil prices will be at $40.50 per barrel. According to this data, the WTI crude oil barrel will have an average price of $45.70 in 2021, while the Brent oil crude will cost $49.70.
Regarding the oil demand, the organization expects it to recover by the end of 2021, going up to 101.1 million barrels per day in the fourth quarter of 2021.
The U.S. crude oil stockpiles figures were also released. The American Petroleum Institute claims that crude inventories increased by around 2.048 million barrels last week.
West Texas crude oil futures dropped 0.02 percent during yesterday's session, closing it at the 40.62 level. Conversely, Brent oil futures decreased by 0.05 percent, closing the session at the 43.08 level.
The coronavirus outbreak continues advancing around the world, infecting around 11,954,944 individuals and killing 546,720. The United States leads with 3,097,084 confirmed cases, as well as a death toll of 133,972, followed by Brazil, India and Russia. Countries like Israel and the United States are reporting a peak in infections, which increases the fears for a second wave of the virus.
The World Health Organization Director, Tedros Adhanom Ghebreyesus said that the world has not reached the peak of the pandemic yet, rather the outbreak is accelerating.
"In reality, some countries have made significant progress in reducing the number of deaths, while in other countries, theirs are still on the rise," he explained during a video conference.
The Organization for Economic Co-operation and Development recently released a report saying that the unemployment rate went down by 8.4 percent on the OECD countries, going down from April's figure which stood at 8.5 percent. Claiming that the current jobs crisis is worse than the one the world suffered in 2008, the organization warned against a potential “full-blown social crisis” that could be avoided if the government continues supporting the population.
“Macroeconomic policies must remain supportive through the crisis to minimize the risk of a prolonged slump and a lost generation of young people whose labor market prospects are durably harmed,” commented the OECD Secretary-General Angel Gurría.
Besides this, the OECD acknowledged the risk of a second wave of the coronavirus. The organization foresees that if there's not a second wave the OECD countries real GDP will contract by 7.5 percent this year, while if there is a second wave the economy of the OECD countries will contract by 9.3 percent.
Stock markets broke its gaining streak yesterday. The Dow Jones industrial average went down by 1.51 percent, closing at the 25,890.18 level. Conversely, the S&P 500 contracted by 1.08 percent, closing at the 3,145.32 level, while the Nasdaq 100 contracted 0.75 percent, closing the session at the 10,524.01 level.