Oil slides to $66 per barrel over lower demand concerns

Photo: EPA

Crude oil tumbled down to 66 dollars per barrel as latest Covid-19 cases surge prompted lower demand for fuels. The drop in demand is coupled by rising US dollar against major currencies. US which is a major oil consumer also reported record high levels of gasoline inventories, Reuters elaborated.

Circulation of the Delta variant of Covid-19 in areas of low vaccination is driving up the transmission of the coronavirus, the World Health Organization said in a statement. The longer-than-anticipated battle against the invisible enemy has made investors cautious and pragmatic, leading to gradually softer prices. The potential withdrawal of monetary support, the chaotic Taliban takeover of Afghanistan that threatens with another migrant crisis and worries about the continuous spread of the virus keep the dollar in demand, which, in turn, acts as a break on any attempted oil-price rally. Furthermore the dollar hit a nine-month high, weighing on dollar-priced commodities.

The International Energy Agency last week trimmed its oil demand outlook due to the spread of the Delta variant. OPEC, however, left its demand forecasts unchanged. An unexpected rise in US gasoline inventories in a weekly supply report added to demand concerns, given demand for the motor fuel typically peaks during the northern hemisphere summer.

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