Oil price lowest since May on demand concerns amid Covid surge

Published On: Thursday, August 19, 2021 | By:

Oil price lowest since May on demand concerns amid Covid surge

Crude Oil dropped towards $66 a barrel today(19th August 2021) to its lowest since May, due to concerns about weaker demand as Covid-19 cases rise, a stronger US dollar, and a surprise increase in US gasoline inventories. "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 brake on any attempted oil-price rally." Brent crude was down $1.72, or 2.5%, at $66.51 at 0816 GMT, after touching its lowest since May 21. US West Intermediate (WTI) fell $1.96, or 3%, to $63.50 after falling as low as $63.39, also its lowest since May 21. Both Brent and US crude have declined for six days in a row, the longest losing streak since a six-day drop for both contracts that ended on Feb. 28, 2020.

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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