By Barani Krishnan
Investing.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 tensions, 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 as a resilient U.S. jobs report for July raised questions about the continuance of the stimulus provided by the Federal Reserve to markets and the economy. Since the COVID outbreak of March 2020, the Fed has been buying Treasuries and other assets to the monthly tune of $120 billion to support the U.S. recovery from the pandemic.
“A stronger dollar 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 New York-based broker 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, which put paid to any further rebound in oil.