Oil Prices dropped on Monday, which is building on last week’s steep losses, as rising Covid cases prompted fears of a demand slowdown. West Texas Intermediate crude, which is one of the main global benchmarks, declined more than 4% at one point to trade as low as $65.15, a level not seen since May.
The contract recovered some of those losses during afternoon trading and ultimately settled 2.64% lower at $66.48 per barrel. International benchmark Brent crude settled at $69.04 per barrel for a loss of 2.35%, after hitting a low of $67.60.
Bank of America said that the biggest challenge of the Oil market remained uncertain during the rise of delta variant cases. Last week, both contracts dipped more than 7% for their worst week since October. The drop came in the middle of the demand drop as well as a surprise buildup in U.S. crude inventory.
The U.S. Energy Information Administration said Wednesday that crude stocks rose by 3.6 million barrels in the prior week, but the analysts from FactSet were expecting a 2.9 million barrel draw. Gasoline stocks declined by a larger-than-expected 5.3 million barrels.Data out of China also weighed on crude on Monday. The country’s export growth unexpectedly slowed in July, while imports rose 28.1% from a year earlier. This was below forecasts that called for a 33% increase.Analysts of Commerzbank said that China, the world’s second-largest Oil consumer, imported 9.7 million barrels per day in July, the fourth straight month below 10 million BPD.
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