Oil plummets more than 3%, reaches May lows as losses extend to a sixth day

By Stephanie Kelly

NEW YORK (Reuters) –It skidded on Thursday for a sixth session, hitting lows not seen since May, pressured by a stronger US dollar and concerns about weaker demand as COVID-19 cases mount.

The oil market rebounded during the first half of 2021, but the new wave of coronavirus infections around the world has undermined global travel and threatens economic activity. That happens just as major oil producers are preparing supply increases and as drilling activity in the United States increases.

“It seems like a lot of people are being pushed out of long positions,” said Phil Flynn, an analyst at Price Futures Group.

Brent crude was down $ 2.42, or 3.6%, to $ 65.82 a barrel at 11:32 a.m. EDT (1532 GMT), after hitting $ 65.57, its lowest since Nov. 21. of May.

The most active contract for the US West Intermediate (WTI) fell $ 2.54, or 3.9%, to $ 62.67 a barrel. It fell earlier to $ 62.41 a barrel, its lowest level since May 21.

Both benchmarks have declined for six days in a row, the longest losing streak since February 2020.

Volumes on Thursday were relatively low, considering the magnitude of the selloff, Flynn said. Brent volumes were just under 250,000 contracts, while volumes for the most active WTI contract were around 310,000.

The Delta variant in low-vaccination areas is driving the transmission of COVID-19, the World Health Organization said. Coronavirus-related deaths have skyrocketed in the United States over the past month.

The US dollar hit a nine-month high on Thursday after the Federal Reserve meeting minutes showed that policymakers are considering reducing pandemic-era stimulus this year. A rising US dollar makes dollar-denominated oil more expensive for holders of other currencies. [USD/]

“There is concern that the Fed will start to downsize, which will result in a stronger dollar and weaker crude prices,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

US gasoline inventories rose unexpectedly last week, according to federal data, adding to concern over demand. Gasoline consumption in the US tends to peak in the summer months and should decline towards the final months of 2021.

The international Last week, the agency cut its perspective due to the spread of the Delta variant. OPEC, however, kept its demand forecasts unchanged. [IEA/M] [OPEC/M]

(Reporting by Stephanie Kelly; additional reporting by Alex Lawler and Yuka Obayashi; Editing by Marguerita Choy and David Evans)

(Business Standard staff may have only modified the title and image of this report; the rest of the content is automatically generated from a syndicated feed.)

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