On Friday, both US and Brent crude futures’ prices had wrapped up the day more than 2 per cent lower, rounding off the week with a percentage decline of over 8 per cent - the largest weekly plunge in more than nine months, as investors remained fretted over a sweeping downturn in oil demands in context of a clattering surge in Delta cases.
On top of that, taking account of Friday’s downward spiral, both US and UK crude oil contracts had tumbled for a seventh straight session in a row, as a number of G20 economies around the globe had reimposed numerous measures including steep travel restrictions in a bid to put the kibosh on the spread.
Apart from that, China, the world’s second-largest economy had reimposed stiffer disinfection methods at the port as part of its zero-tolerance policy against the pandemic, leading to a widespread congestion, while commodity-centred economies like of Australia and New Zealand had also stiffened restrictions.
Global air travel demands, in tandem, appeared to be softening following a sharp uprising in most of the Summer, addressing to a bleaker-than-anticipated oil demand outlook amid an OPEC+ output hike of 0.4 million bpd (barrels per day) each month up to December starting from August.
Meanwhile, addressing that it would likely to be a rough-ride for black gold contracts to find a technical support level with such kind of uncertainty whirling around the market, a Bank of American commodity & derivative strategist, Francisco Blanch said in a client note, “The oil market has quickly noticed that the Delta variant is a growing problem and a potential hurdle to a mobility/fuel demand recovery”.
Crude oil prices plummet to multi-month lows
Citing statistics, on Friday’s commodity market wind-down, the UK crude futures’ prices jolted 1.9 per cent to $65.18 per barrel, the lowest level since April, while US West Texas Intermediate (WTI) crude oil futures scheduled to be expired on September tottered as much as 2.2 per cent to settle down at $62.32 a barrel.
On the week, UK crude lost 8 per cent, while US crude oil contracts had shrugged off 9 per cent.