ISLAMABAD: Crude prices fell for a seventh consecutive day on Friday amid concerns over weakening demand due to a surge in the Covid-19 delta variant, a brawny US dollar and a surprise increase in US gasoline inventories.
At 1115 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $0.38 (-0.57 percent) to reach $66.06 a barrel, its lowest since May. Similarly, the US West Texas Intermediate (WTI) reached $63.17, down by $0.52 (-0.82 percent).
The price for Opec Basket was recorded at $69.40 a barrel with 0.36 percent decrease, Arab Light was available at $67.77 a barrel with 0.86 percent decrease, while the price of Russian Sokol slipped to $66.45 after shedding 0.76 percent.
Oil prices continued to trade lower on demand concerns as Covid-19 delta variant spreads across the globe forcing governments to introduce movement restrictions and other preventive measures. The strong US dollar is also weighing on prices. Even the latest drawback in the US inventories couldn’t give a smile to the oil bulls, while the US inventories declined more than 3 million barrels last week, more than twice as much as the 1.5 million barrels pencilled in by analysts.
The strong US dollar as well as a surge in the coronavirus cases globally especially in the Far East and in the US are raising fears that economic recovery might have temporarily slowed down, denting oil demand. The International Energy Agency (IEA) also cut its demand forecast for oil for the rest of 2021 due to the more virulent delta strain, which may lead to renewed lockdowns in certain parts of the world and affect energy consumption.
Demand for the second half of the year has been lowered by more than 500,000 barrels per day from last month’s projection. Global oil demand is now expected to rise 5.3 million barrels per day on average to 96.2 million bpd in 2021, and a further 3.2 million bpd in 2022, according to the IEA.