Oil prices are headed for their longest stretch of daily declines since 2019 after the U.S. Federal Reserve signaled that it would start tapering stimulus later this year.
As the U.S. dollar rallies and concerns grow about global energy demand, West Texas Intermediate crude oil futures fell for a seventh consecutive day, taking the cumulative decline for this week to 7.3%.
Other raw materials such as copper and iron-ore have also dropped this past week following the U.S. central bank’s signal that it will begin to taper this year.
Oil has been hit this month by the prospect of the U.S. Federal Reserve cutting back on its asset purchases. The pandemic also remains a threat to energy demand, especially across Asia, with China restricting mobility to combat an outbreak of the Delta variant.
Crude oil’s bout of weakness comes as expectations ease for further large inventory draws in the coming months. Bank of America (NYSE:BAC) said this week that prices are likely to be rangebound in the second half of the year as the Delta variant continues to spread.
West Texas Intermediate crude oil for September delivery fell 0.4% to $63.45 U.S. a barrel in London trading on Friday (August 20). Prices are now in the longest losing streak since October 2019. Brent crude oil futures for October settlement declined 0.2% $66.31 U.S. a barrel.