As we’ve seen over the previous four days, oil prices fell on Wednesday just as they did for the last several days, because we have been wary of the coronavirus. WTI crude oil bears a downward trend.
WTI crude oil is down around 1.6 percent, having dropped from a high of $67.47 to a low of $65.29.
We have experienced many days of weakness as a result of the increase in coronavirus infections caused by the Delta variant in the United States and across the globe.
Several nations have reintroduced travel restrictions in recent weeks, although aviation traffic has loosened.
Japan, one of the world’s biggest oil importers, has declared that the coronavirus state of emergency would be extended until September 12 rather than ending this month.
The state of emergency declared in July for Tokyo, Osaka, Okinawa, and three more areas will be prolonged and enlarged.
“This is expected to have an effect on gasoline consumption in Japan, the world’s fourth biggest user and importer of oil. As a result, the recovery from last year’s demand downturn will undoubtedly take longer.”
Meanwhile, the market was aided in halting the fall in prices by a larger-than-expected decrease in US oil stockpiles.
Last week, investors reduced their holdings by 3.2 million barrels to 435.5 million barrels, the lowest level since January 2020 and more than expected.
The increase comes on the heels of a 3.8 percent decline in prices over the previous four bearish days, fueled by concerns that the wildfire spread of Covid-19 in the United States and Southeast Asia is reducing demand.
However, gasoline inventories increased slightly, preventing the market from rising further due to continuing concerns about coronavirus.
The International Energy Agency forecast last week that oil consumption would decline by more than 500,000 barrels per day in the second half of this year.
The US dollar, on the other hand, continues to outperform due to its safe-haven reputation and the anticipation of a tapering announcement in the coming weeks.
The US dollar index DXY rose 0.11 percent to 93.264, its highest level since April, and remained steady at 93.00 since WTI crude oil bears a downward trend.
Crude oil prices often fluctuate in the opposite direction of the dollar, since the commodity is priced in dollars; as the US currency depreciates, oil becomes less costly for international customers.