Prices for petroleum stabilized approaching noon EDT on Wednesday after four days of declines, with investors still worried about the outlook for fuel demand as the use of rail, air and other forms of transport remained constrained amid surging COVID-19 cases worldwide.
Brent crude was up 70 cents or 1%. U.S. oil gained 63 cents or 1% to $67.22 a barrel.
A stronger American dollar was also hitting commodities across the board, with metals and precious gold in particular as “equally fragile” as oil.
Crude is typically priced in dollars, so a stronger greenback makes oil more expensive, hitting demand.
In the United States, more supply is set to hit the market if official forecasts prove right.
U.S. shale oil production is expected to rise to 8.1 million barrels per day (bpd) in September, the highest since April 2020, according to the government’s Energy Information Administration’s monthly drilling output report.
U.S. crude oil and gasoline inventories fell last week, according to two market sources, citing American Petroleum Institute figures on Tuesday, while distillate stocks rose.
Financial markets overall are shrinking in response to the Delta variant’s progress, softer U.S. economic data, and a sombre reflection on what is going on in Afghanistan, according to some analysts.