MOSCOW (MRC) -- Oil prices fell for a seventh straight session on Friday towards three-month lows as investors became less bullish about fuel demand due to a surge in cases of the COVID-19 Delta variant that is hitting travel, reported Reuters.
Brent crude fell USD1.03, or 1.6%, to USD65.42 a barrel by 11:55 a.m. EDT (1555 GMT), near its lowest since May and down about 7% for the week.
US West Texas Intermediate (WTI) crude for September, due to expire on Friday, fell USD1.07, or 1.7%, to USD62.62 a barrel and was down almost 8% for the week.
China, the world's largest crude importer, has imposed new restrictions with its "zero tolerance" coronavirus policy which is affecting shipping and global supply chains. The United States and China have also imposed tit-for-tat flight capacity restrictions.
"They are acting severely for minimal outbreaks which is a direct threat for the demand profile there," said John Kilduff, partner at Again Capital LLC in New York.
Several US firms, meanwhile, have delayed return-to-office plans as Delta cases spike and countries across Asia are reimposing lockdowns.
The US dollar hit a nine-month high on signs the US Federal Reserve is considering reducing stimulus this year. Oil prices move inversely to the US currency, making oil more expensive for foreign purchasers when the dollar rallies.
Oil demand could also fall as the period of peak US gasoline demand nears its end and European summer holidays come to a close.
Lockdowns in other in major economies around the world have likely harmed the economic activities and growth forecasts in the months to come, said Margaret Yang, a strategist at Singapore-based DailyFX.
As MRC informed previously, crude oil stockpiles fell modestly in early August, while gasoline inventories dipped to their lowest level since November, according to the US Energy Information Administration. Crude inventories fell by 447,000 barrels in the week to Aug. 6 to 438.8 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop. Overall crude inventories have been on the decline for several weeks due to increased demand.
We remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
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