Oil falls for sixth straight day, falling to its lowest stage since Might on concern of slowing progress

Oil pumping platforms are located next to a table grape vineyard seen north of Bakersfield, California on July 8, 2021.

George Rose | Getty Images

Oil prices fell for a sixth straight session on Thursday, falling to their lowest level since May as demand fears and comments from the Federal Reserve that it would suspend its bond-buying program spun prices.

Crude oil came under pressure from the weakness of the commodities market and stocks in general.

West Texas Intermediate’s crude oil futures, the US oil benchmark, slipped $ 2.38, or 3.6%, to $ 63.08. The contract is in its longest daily losing streak since February 2020 and is now down more than 8% for the week. The international Brent crude oil benchmark fell 3.2% to $ 66.02 per barrel.

The dollar rose Thursday after minutes of the US Federal Reserve’s July meeting suggested slowing the pace of their monthly bond purchases. A strong dollar can put oil under pressure as it makes the commodity more expensive for foreign buyers.

Weak data from China also put pressure on crude oil in recent sessions after data released Monday showed the economy slowed more than expected in July. In addition, the country’s refinery production fell to its lowest level in 14 months.

“Demand concerns due to the worldwide spread of the delta variant continue to oppose higher prices,” the analysts at Commerzbank recently wrote in a customer announcement.

Data released by the US Energy Information Administration on Wednesday showed a surprising surge in gasoline inventories, raising concerns about a weaker than expected end of the summer driving season.

“The summer driving season still has three weeks ahead of it, but it is already clear that it will not meet the high expectations,” continues Commerzbank.

Oil made a tremendous comeback in the first half of the year as demand returned and producers kept supply under control. But momentum began to falter in July as the Delta variant spread. WTI is now down 18% from its recent high of $ 76.98 on July 6th.

“There are still too many question marks about the outlook for crude oil demand over the next few months and that will weigh on crude oil prices,” said Ed Moya, senior market analyst at Oanda. “After the Fed minutes were released, risk aversion prevailed and oil prices returned to their lows,” he added.

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