Oil's Losing Streak Hits Six Days, Benchmarks Touch May Lows

Oil prices skidded on Thursday for a sixth session, hitting lows not seen since May, as investors pulled back over concerns about weakened global demand as COVID-19 cases climb and on the back of a rise in the U.S. dollar. The oil market rallied throughout the first half of 2021, but has lost about 15% since early July. The recent wave of coronavirus infections worldwide has sapped global travel and threatens economic activity, just as major oil producers are getting ready to increase supply.

"There seems to be a lot of people getting squeezed out of long positions," said Phil Flynn, analyst at Price Futures Group.

Brent crude lost $1.78, or 2.6%, to settle at $66.45 a barrel, after touching $65.57, the lowest level since May 21. The most-active contract for U.S. West Intermediate (WTI) fell $1.71, or 2.6%, to $63.50 a barrel. It fell earlier to $62.41 a barrel, the lowest level since May 21.

Both benchmarks have declined for six days in a row, their longest losing streak since February 2020.

Brent volumes were above 330,000 contracts, while volumes for the most-active WTI contract were more than 450,000, the highest since July 20.

The Delta variant of the coronavirus in areas where vaccine rates are low is driving transmission of COVID-19, the World Health Organization said. Coronavirus-related deaths have spiked in the United States over the past month.

The U.S. dollar hit a nine-month high on Thursday, a day after minutes from the Federal Reserve's last policy meeting showed policymakers are considering reducing pandemic-era stimulus this year. A rising U.S. dollar makes greenback-denominated oil more expensive for holders of other currencies.

"There's concern that the Fed will begin tapering, resulting in a stronger dollar and weaker crude prices," said Andrew Lipow, president of Lipow Oil Associates in Houston.

U.S. gasoline inventories rose unexpectedly last week, federal data showed, adding to concern about demand. U.S. gasoline consumption tends to peak in the summer months, and should ebb headed into the latter months of 2021.

The International Energy Agency last week trimmed its oil demand outlook due to the spread of the Delta variant. OPEC, however, left its demand forecasts unchanged.