Oil Price takes further hit as Covid variant persists – EnergyHub News

Oti Francis

Oil price took further steps down this week after its initial gain 5 months ago. According to Bloomberg, the recent Covid-19 fear seems to be swaying market forces and the outlook of fuel demand.

Crude oil futures in New York are a type of trading asset that require traders to transact at future dates and prices, took a hit below $68 per barrel. This was after gaining almost 10% since the last three sessions. Decreasing US stock, a pickup in India’s demand, and China’s efforts at containing the latest COVID resurgence give hope to the market. However, the lockdown on movements still haunt business in regions where the delta variant of the virus is spreading fast.

Oil price remains volatile this August, dropping this week since October 2019’s worst fall. The European Union is likely to address whether to reinstate travel restrictions on US visitors visiting its territories as the cases grow. As for the market, stakeholders are optimistic for a change in production policy from the OPEC+ alliance during their September 1 meeting.

According to Victor Shum, vice president of energy consulting for IHS Markit in Singapore, “The persistent spread of the delta variant is weighing on transport fuel demand, particularly in Asia-Pacific markets where vaccination rates are low. The oil price rally this week cannot be sustained.”

Stakeholders are also expected to be keenly monitoring the Jackson Hole meeting from Thursday for key insights on how the Federal Reserve will ease stimulus. The dollar currency also peaked, making the price of raw materials such as oil more expensive for investors.

Credit: Bloomberg, Rigzone

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