Oil slides 2% on worries about weak demand
Saudi Arabia cuts prices to Asia; US, Europe prices steady; Weak US jobs data, strong dollar weighs on oil; Over 80% of oil output in Gulf of Mexico still offline
Oil prices fell on Tuesday on concerns about weak demand in the United States and Asia, although ongoing production outages on the US Gulf Coast helped to limit losses.
Industry analysts said a strengthening US dollar also weighed on crude prices. A strong dollar makes oil more expensive for holders of other currencies.
US West Texas Intermediate crude was down $1.45 or 2.1 per cent from Friday’s close at $67.84 a barrel at 1648GMT. There was no settlement price for Monday due to the Labour Day holiday in the United States.
Brent crude futures fell 93 cents, or 1.3 per cent, to $71.30 a barrel by, after falling 39 cents on Monday.
The US economy created the fewest jobs in seven months in August as hiring in the leisure and hospitality sector stalled amid a resurgence in Covid-19 infections.
Analysts said the oil market was still assessing the data from Friday as well as Saudi Aramco’s move on Sunday to cut October official selling prices (OSPs) for all its crude grades sold to Asia by at least $1 a barrel.
The deep price cuts, a sign that consumption in the world’s top-importing region remains tepid, come as lockdowns across Asia to combat the Delta variant of the coronavirus have clouded the economic outlook.
“There’s some concern about demand going forward because of a weak jobs report in the US and Covid fears. The market is catching a bad mood,” said Phil Flynn, analyst at Price Futures Group in Chicago.
Oil prices found some support from strong Chinese economic indicators and continued outages of US supply from Hurricane Ida.
China’s crude oil imports rose eight per cent in August from a month earlier, customs data showed, while China’s economy got a boost as exports unexpectedly grew at a faster pace in August.
More than 80 per cent of oil production in the Gulf of Mexico remained shut after Ida, a US regulator said on Monday, more than a week after the storm made landfall and hit critical infrastructure in the region. — Reuters
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