Oil prices fell on Tuesday, affected by a strong dollar and concerns about demand in the United States and Asia, but continued production outages on the US Gulf Coast limited losses.
US West Texas Intermediate crude was settled at $68.35 a barrel, down 94 cents, or 1.4 percent, from Friday’s close, and touched the lowest level in the session at $67.64 a barrel. There is no settlement price for the first Monday due to the Labor Day holiday in the United States.
Brent crude futures fell 53 cents, or 0.7 percent, to $71.69 a barrel, after dropping 39 cents the day before yesterday.
John Sauser, vice president of crude oil markets at Mobius Risk Group in Houston, said the dollar’s rally and Saudi Arabia’s move on Sunday to lower its October OSPs were putting pressure on crude. The rise of the dollar makes oil more expensive for holders of other currencies.
“People are reading the Saudi price change as a sign of easing Asian demand, and the size of the reduction was larger than expected,” Sauser said.
Saudi Arabia reduced the prices of all crudes sold to Asia by at least one dollar a barrel. The move, a sign that consumption in the world’s most importing region remains lackluster, comes as lockdown measures across Asia to combat the delta strain of the coronavirus cloud the economic outlook.
Data released on Friday also indicated that the US economy created the fewest number of jobs in seven months in August, as employment in the leisure and hotel sector faltered, in light of the return of the number of Covid-19 infections to increase.
But oil prices were supported by strong economic indicators in China and the continued disruption of US supplies due to Hurricane Ida.
Customs data revealed that China’s imports of crude oil increased eight percent in August from a month ago, while the Chinese economy received a boost when the pace of export growth unexpectedly accelerated in August.
A US regulator said today that about 79 percent of oil production in the Gulf of Mexico is still halted, which is equivalent to 1.44 million barrels per day, more than a week after IDA started.
Follow the world news from the statement via Google News