Crude Oil prices continued to slide for fifth consecutive day as the demand for Oil weakens amid fears of the Delta Variant. The demand has weakened as the use of rail, road and air remained constrained in the wake of surging COVID cases globally.
Brent Crude was down 5 cents (0.1%) at USD 68.98 per barrel on Wednesday after falling 0.7% on Tuesday.
In the Asian markets, the demand has weakened because of China’s industrial and retail slowdown, floods, port constraints amid the coronavirus pandemic, and with the government clamping down on import quote of private refiners.
In India also the consumer travel behaviour is severely affected which has slowed down the demand in India. As the global oil price slide down to a lower trajectory, India which is the world’s third largest Oil importer has also started sales of Oil to state-run refiners out of its Strategic Petroleum Reserve (SPR) in a major policy shift.
Another reason for weakening of demand and consequent price decline is a stronger dollar which affects the Crude Oil which is typically priced in dollars therefore an expensive dollar means weaker demand for Crude Oil market price.
In the United States more supply is expected to enter the market. US Shale Oil production is expected to rise to 8.1 million barrels per day in September.
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