Oil Has Worst Week in 9 Months as Dollar Hobbles Crude’s Rebound

© Reuters.

By Barani Krishnan

AiVIF.com - Oil posted its worst weekly loss in nine months as a soaring dollar on Friday hobbled any attempt by crude prices to rebound on Mideast tension,  after a week of negative news on Covid.

New York-traded U.S. West Texas Intermediate crude, the benchmark for U.S. oil, settled Friday’s trade down 81 cents, or 1.2%, at $68.28 per barrel. For the week, WTI lost 7.7%, its most since the 10% drop during the week to Oct. 23, 2020.

London-traded Brent, the global benchmark for oil, was down 85 cents, or 1.2%, at $70.44 per barrel by 2:55 PM ET (18:55 GMT). Brent lost almost 8% for the week, also its biggest weekly decline in nine months.

Oil and most other commodities tumbled as the dollar sprung back from a recent spate of selling amid a resilient U.S. jobs report for July raised questions about the stimulus provided by the Federal Reserve to markets and the economy. 

“A stronger dollar however will likely prove to be a big drag over crude prices in the short-term,” said Ed Moya, who heads research for the Americas at brokers OANDA.

Crude prices were down for the first three days of the week amid a global surge in coronavirus cases from the Delta variant that cast a pall over the outlook for oil demand.

In the United States, the world’s biggest oil consumer, Covid cases hit a six-month high with more than 100,000 infections reported earlier this week, according to a Reuters tally.

Crude prices did manage to catch a break on Thursday on Mideast tensions as Israeli jets struck purported rocket launch sites in Lebanon in response to an earlier attack, allegedly by Tehran. That was before the dollar’s rebound on Friday put paid to any further rebound in oil.