By Barani Krishnan
Investing.com - The rut in oil is deepening, with the one-two punch of a resurgent dollar and new Covid restrictions in No. 2 economy China wiping nearly 10% off crude prices in just over a week.
New York-traded U.S. West Texas Intermediate crude, the benchmark for U.S. oil, settled Friday’s trade down $1.80, or 2.6%, at $66.48 per barrel. Last week, WTI lost 7.7%, bringing the combined drop over the past six sessions to above 9%.
London-traded Brent, the global benchmark for oil, settled down $1.66, or 2.3%, at $69.04 per barrel. Brent lost 7.7% last week, its biggest weekly decline in nine months.
“Crude prices are declining as a slowdown in Asia disrupts the demand outlook,” said Ed Moya, analyst at New York’s OANDA.
Trading beneath $70 a barrel appears to be a new normal for WTI and Brent, which have fetched prices well above that mark over the past two months.
The plunge in oil came amid new Covid-related curbs in Asia, especially in China, that stoked worries about a setback in global fuel demand.
China, the world's second largest oil consumer, cancelled a horde of flights and issued warnings against travel in 46 cities, and limited public transport and taxi services in 144 of the worst Covid-hit areas.
A rally in the U.S. dollar, which hit a near three-week high against a basket of other currencies, also weighed on oil prices after Friday's stronger-than-expected U.S. jobs report spurred bets that the Federal Reserve could move more quickly to tighten monetary policy
A stronger U.S. dollar makes oil more expensive for holders of other currencies.