Oil prices fell slightly on Friday for the first time in three sessions, with WTI crude at $73.1 per barrel. Technology index futures also fell on U.S. stock markets: Nasdaq lost more than 1 percent.
The main theme for the oil market seems to be the rise in cases of Covid-19. In the U.S., the CDC reported on Thursday that 69.3 percent of states had transmission rates of the coronavirus high enough to justify wearing masks indoors in public places and they should resume that policy immediately. In China, 64 new cases were reported on Thursday, up from 49 the day before, with the city of Nanjing currently struggling with an outbreak of the Delta variant.
Despite this, both key crudes WTI and Brent appear to be heading for gains of around 2% for the week. This comes on the back of news of tight oil supplies and a statement from the Federal Reserve that the US economic recovery is still on track. However, it is not only in the US. The IMF expects the global economy to grow by 6 percent this year, compared to a 3.2 percent decline in the pandemic year of 2020. Plans for massive spending in developed countries, especially in the United States, are expected to be behind the growth.
Amazon explains slowing sales
On the U.S. stock market, the mood may have been spoiled by the results of Amazon, whose shares were down more than 7 percent in after-session trading. For the second quarter of 2021, earnings per share came in at $15.12 against expectations of $12.30, but revenue came in below consensus at $113.08 billion against expectations of $115.2 billion. This is the first time this has happened in three years.
The company said that sales growth will slow down in the coming quarters as customers are more likely to leave their homes to shop after the acceleration of vaccinations for COVID-19. Moreover, Apple warned that chip supply constraints could affect iPhone and iPad sales this quarter, and Facebook also warned of a slowdown in business growth. As a result, futures on the Nasdaq index of technology companies appear to be down more than 1 percent.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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