OPEC Oil Prices

Crude Oil Drops for Sixth Straight Session; Brent, WTI Down over 1.2%

Crude oil prices extended their losses into a sixth day on Thursday, hovering near 3-month lows, hurt by growing fears over slower fuel demand amid a spike in Covid-19 cases worldwide while an unexpected rise in U.S. gasoline inventories added to the pressure.

Brent crude was down 85 cents or 1.3% at $67.38 a barrel by 0019 GMT, having fallen 1.2% on Wednesday. U.S. West Intermediate crude (WTI) lost 93 cents or 1.4% to $64.53 a barrel after tumbling 1.7% in the previous session.

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                                                                                                 Brent Crude futures, technical performance chart

Both oil benchmarks have lost more than 5% over the past six sessions, trading near their lowest level since May 24 in the previous session.

The slide continued as investors remained worried over the increase in infections caused by the Delta variant of the coronavirus worldwide.

“Crude prices continue to look vulnerable around those mid to late summer support levels — $65 in WTI and $67 in Brent,” Craig Erlam, senior market analyst at OANDA Europe, said in a note.

Slower growth in China as it imposes further restrictions in response to rising Covid-19 cases and some weakness in a few U.S. data points this past week has driven the softness in oil prices, he cited.

“A move below $65 in WTI, for example, could see prices drop back into Q2 trading ranges between $57 and $65. This would be quite a drop from the levels we’ve seen the last couple of months and surely reflect growing concerns about the spread of delta and the implications for fourth quarter growth,” he added.

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                                                          The West Texas Intermediate (WTI) Index, technical performance chart.

The surprise build in U.S. gasoline inventories also fueled concerns over slowing demand.

U.S. crude oil inventories fell 3.2 million barrels last week to 435.5 million barrels, their lowest since January 2020, the Energy Information Administration said on Wednesday.

But gasoline stocks rose by 696,000 barrels to 228.2 million barrels, against analysts’ expectations for a 1.7 million barrel drop.

Minutes of the U.S. Federal reserve’s July 27-28 policy meeting showed officials noted the spread of the delta variant could temporarily delay the full reopening of the economy, and restrain the jobs market.

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