02:43 PM EDT, 08/20/2021 (MT Newswires) -- West Texas Intermediate (WTI) crude fell for a seventh-straight session on Friday as demand pessimism continues with the wildfire spread of the Covid-19 delta variant forcing travel restrictions in Southeast Asia and elsewhere.
In its final day as the active contract, WTI crude for September delivery expired down US$1.37 to US$62.32 per barrel, the lowest since May 20. October WTI fell US$1.36 to US$62.14.
October Brent crude, the global benchmark, was last seen down US$1.33 to US$65.12 while Western Canada Select was down US$1.95 to US$49.29 per barrel.
The drop comes as surging new Covid-19 infections in Southeast Asia, the United States and elsewhere are limiting demand as voluntary and imposed travel restrictions cut fuel use even as the end of the U.S. driving season approaches.
"Rising cases of the Delta variant and subsequent travel restrictions have halted the recovery in road traffic in some countries, ANZ Bank said in a report. "China 's road congestion and air traffic has been declining due to recent lockdowns. US air passenger numbers dropped below 2 million after hovering around 2.2 million on recent months."
A rise in the U.S. dollar to the highest since November has also cut into prices as expectations that the Federal Reserve will soon move to a more hawkish policy raise concerns that economic growth will slow.
Still, some expect that the 10% drop in prices over the commodity's losing streak may be overblown and demand has not fallen sufficiently to justify the sell off.
"We view this price slide as exaggerated. So far, the demand concerns that are responsible for it are for the most part only in the minds of market participants. Apart from the IEA's downward revision of the demand forecast a week ago, there are no really robust data to confirm this. Despite the further increase in oil production by OPEC+, the oil market is not oversupplied - at least for now," Commerzbank analyst Carsten Fritsch said in a note.