Oil Prices Drop Amid Spike in COVID-19 Cases Nationwide
With cases of COVID-19 spiking in recent weeks, that has caused the price of oil to drop with fears of recovery setback.
According to the Midland Reporter-Telegram, oil futures in New York took a dive on Monday after OPEC agreed to a 400,000 barrel hike of monthly supplies and the Delta variant is on the rise across the country.
West Texas Intermediate Crude Oil for August dropped to $66.42 a barrel, a drop of $5.39.
“The demand story has really taken a big hit here, and on the supply side, we’re getting more barrels of crude,” said Ed Moya, Senior Markets Analyst at Oanda Corp. “The momentum behind this move could get ugly.”
Oil prices have remained unstable over the past couple of weeks because OPEC has been in a dispute over supplies.
“As supplies from other producers not part of the deal rebound, and demand falls seasonally, stocks could see renewed builds early in the year,” said Toril Bosoni, Head of IEA's Oil Industry and Markets Division.
Worldwide the Delta variant of COVID-19 has increased infections especially in Indonesia, India, and Brazil with the U.K. seeing the most cases there since January.
“We’ve got risk aversion firmly in place and it’s all triggered by the spread of the delta Covid-19 variant,” said Ed Moya of Oanda Corp. “There’s this fear that you’re not going to have that strong economic recovery we were all hoping for in the second half of the year.”
The unstable oil market could continue till the end of the year provided the Delta variant doesn't put everyone back in lockdown in the future.