Can the rally continue in August as well?
Economic recovery slowing down, can it cool the Oil market? This is an essential question for Oil traders. On the other hand, the Delta variant of Coronavirus also is another serious threatens in the market.
Currently, WTI is trading at the same level (73.22), where it started the July. After the sell-off in the first half of July, we can see a rebound in the second half to regain its loss.
Yesterday and Today's GDP published numbers from Germany, Eurozone, the US, and Canada telling us that the overall economic outlook is positive; however, the pace is lowered.
For the following months, mostly Oil market focus will be on Virus spreading and Iran negotiations with western powers.
As the next wave of COVID-19 started in some countries, it can affect the market demand; however, as officials are talking about, another lockdown is far from our expectations, while usually, August is one of the most higher demand periods due to the rapid growth of the tourist sector and especially traveling, both land and Air travel.
Earlier this month, OPEC and its allies, known as OPEC+, agreed to increase market supply by 2 million barrels per day by the end of 2021, step by step, and 400K barrels every month.
Another market worry is Iran Oil. Iranian and western powers are negotiating for the past months and after President Biden takes over the White House. If the negotiations get to the point, Iranian Oil can be back into the market by lifting the US sanctions, but it does not seem to happen in 20201, especially in August.
And in short, our total overview for August is still positive, and from a fundamental point of view, we can see higher prices, while in the following months, with increasing supply, we can see lower demand.
From the technical point of view, 72.10 is critical, while between 20 and 50 DMA, we can not see any direction. Breaching under 50 DMA at $71 can bring the July low at 65 in the spotlight.