Distribution of the Delta variant in areas of low vaccination is pushing transmission of coronavirus, the World Health Organization stated. CVID-19-related deaths have spiked in the United States across the past month.
According to Tamas Varga of oil broker PVM, the longer-than-anticipated fight against the invisible enemy has made investors wary and practical, pointing to progressively softer prices.
The possible withdrawal of monetary support, the turbulent Taliban takeover of Afghanistan that intimidates another migrant crisis, and concerns regarding the continuous spread of the coronavirus keep the greenback in demand, which, in turn, serves as a brake on any attempted oil-price rally.
The dollar scored a nine-month high, counting on dollar-priced commodities. [USD/]
Brent crude was below $2.05, or 3%, at $66.18 at 1330 GMT, following touching its lowest after May 21. U.S. West Intermediate (WTI) dropped $1.81 or 2.8%, to $63.65 after slipping as low as $62.83, its weakest after May 21.
Both Brent and U.S. crude have sunk for six days in a row, the most extended losing streak after a six-day slide for both contracts that closed on Feb. 28, 2020.
Fed starting to tapering its stimulus
According to Naeem Aslam of broker Avatrade, anxieties about discouraging demand expectations due to increased COVID-19 cases worldwide have added to the fall.
Last week, the International Energy Agency cut its oil demand outlook because of the spread of the coronavirus Delta variant. OPEC, nevertheless, left its demand estimates consistent. [IEA/M] [OPEC/M]
A sudden increase in U.S. gasoline inventories in a weekly supply record appended demand worries, given that the demand for motor fuel usually peaks during the northern hemisphere summer.
The substantial U.S. dollar is attaching to the pressure. The dollar has surged on expectations the Federal Reserve will begin tapering its stimulus this year. A strong greenback makes oil more costly to other currency owners and points to weigh on prices.