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·         Oil prices in longest losing streak since February 2020

Oil prices fell for a sixth day in their longest losing streak since February 2020, as a spike in COVID-19 cases worldwide fuelled fears of lower fuel demand while a surprise build in U.S. gasoline inventories and a stronger dollar added to the pressure.

Brent crude was down US$1.11, or 1.6per cent, at US$67.12 a barrel at 0639 GMT, after touching the lowest since May 24 at US$67.06 earlier in the session.

U.S. West Intermediate crude (WTI) fell US$1.35, or 2.1per cent, to US$64.11 a barrel after falling to as low as US$64.02, also the lowest since May 24.

WTI has dropped more than 7per cent while Brent has slumped more than 6per cent during the six-day losing streak, the longest since a six-day decline for both contracts that ended on Feb. 28, 2020.

The declines reflect worries over rising coronavirus infections caused by its Delta variant, with virus-related deaths in the United States, the world's largest oil user, spiking over the past month.

Slower growth in China, the world's biggest oil importer, caused by new restrictions in response to rising COVID-19 cases and some weakness in U.S. data over the past week have driven the softness in oil prices, Erlam said.

 

·         Crude Oil to rebound towards $75-78 by year-end as vaccination rates rise – ANZ

The Delta variant is casting a cloud over the oil market. Although oil demand is expected to slow, it will not cut off the path to normalisation. Crude oil prices are set to rise to $75-78/bbl in Q4 2021, according to forecasts of strategists at ANZ Bank.

 

·         Surging COVID-19 cases in Asia to weigh on oil demand

“Despite the Delta variant headwinds, we expect continued growth in vaccination rates to support the ongoing recovery in global demand. We expect Q4 2021 demand to rise 2.6 million b/d to 98.63 million b/dfrom Q3, the highest levels seen since Q4 2019. Overall, this should see the market remain tight, with further drawdown in inventories around 800kb/d in Q3 and 1.6mb/d in Q4.”

“Crude oil prices will face some downward pressure in the coming weeks due to lingering headwinds in Asia and because the market has been leading consistently higher and earlier than what fundamentals suggest.”

“We expect rising vaccination rates to lead to an improvement in sentiment in the latter part of the year. Along with the continued recovery in demand, we should see crude oil prices return to USD75-78/bbl in Q4.”

Reference: Channel News Asia, FXStreet