Crude oil prices are witnessing their worst run in about four months as concerns about the softened demand have resurfaced in the global oil market.
The prices of Brent Crude Oil Futures for October 2021 have crashed 9.3% in the current month as they tanked to US$69.23 a barrel from US$76.33 a barrel at the end of last month.
Similarly, the prices of Western Texas International (WTI) futures for September 2021 have crashed 9.44% in the month of August – trading at US$66.97 a barrel – down from US$73.95 a barrel at the end of July 2021.
Experts suggest that woes about potential erosion in the global oil demand have resurfaced with the acceleration of the Delta variant infection rate across the world.
The new travel restrictions in China, the world's second largest oil consumer and the second largest economy, are also being considered as a major contributing factor to the bleak outlook for oil demand growth.
The curbs in the world’s most populous country include flight cancellations, warnings by 46 cities against travel, and caps on public transport and taxi services in 144 of the worst hit areas.
COVID-19 has resurfaced in the country after a year, with China reporting 125 cases on August 8– up from 96 a day before.
Last year, as the pandemic spread from China to the rest of world, the demand outlook had got so bleak that the prices of Western Texas International crashed to negative and were trading at minus (-)US$40 a barrel.
The current southward trend in crude oil prices is a complete reversal of fortunes for the commodity from the month ago – when the world was talking about oil prices touching US$80 a barrel. Back then, oil prices were soaring as major oil producing nations failed to arrive at consensus over restoration of supply cuts.