NEW YORK: Oil prices fell about 1% on Wednesday after four straight days of declines, as investors remain worried about the outlook for fuel demand as COVID-19 cases surge worldwide and on rising strength in the US dollar.
Brent crude was down 68 cents, or 1%, to $68.35 a barrel by 1:30 p.m. EDT (1730 GMT). US WTI crude oil lost $1.05, or 1.6%, to $65.54 a barrel.
The US dollar index was up 0.1%, hitting its highest level since April.
Crude prices often move inversely to the dollar because the commodity is priced in dollars; when the US currency rallies, it makes oil more expensive for foreign buyers.
Oil markets have experienced several days of weakness due to the rise in infections caused by the Delta variant of the coronavirus both in the United States and worldwide. Several countries have re-introduced travel restrictions and air traffic has softened in recent weeks.
The market was helped by a bigger-than-expected drawdown in US crude inventories, which fell 3.2 million barrels last week to 435.5 million barrels, their lowest since January 2020. Gasoline stocks, however, rose modestly, which kept the market from moving up given ongoing worries about coronavirus.
“The market is being dragged down on a disappointing gasoline inventory build as we make our way into the Labor Day weekend,” said Andy Lipow, president of Lipow Oil Associates in Houston, Texas, referring to the Sept. 6 US holiday.
The four-week average of overall US product supplied to the market - a measure of demand - was 20.8 million barrels per day, in line with pre-coronavirus levels from 2019. Gasoline product supplied was 9.5 million bpd, just 1% below 2019 levels.
US fuel demand has steadily increased throughout the year as consumers have resumed activities with vaccination rates going up.
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